Mozambique awaits decisions from the new management of Tongaat Hullet sugar group

27 September 2019

South African sugar group Tongaat Hulett, which has two factories in Mozambique, has changed its management in an attempt to address the serious financial difficulties it is facing, according to a market statement released this week.

The Mozambican Minister of Industry and Trade said at the end of August that the government had already secured alternatives to South African group Tongaat Hulett to keep the sugar-producing units of Xinavane in Maputo province and Mafambisse in Sofala in operation.

“We have the situation under control,” said de Sousa, who was speaking in Ricatla, in Marracuene district, during the 55th edition of the Maputo International Fair.

The Tongaat Hulet Group controls 85% of the share capital of the Mafambisse unit and 88% of Xinavane, the latter being the largest sugar producer in Mozambique with an installed capacity of 250,000 tonnes per year and production exceeding 200,000 tonnes in 2018.

In June it was announced that the South African group had verbally communicated to workers at the Mafambisse sugar factory and the Mozambican government that it would abandon activity in the region while keeping operations at the Xinavane factory.

The Mafambisse unit, originally built in 1965 and recovered in the late 1980s at a cost of about US$50 million, is located near the Pungwe River in the Dondo district of Sofala province.

The Tongaat Hulett group began managing the sugar plant in 1996, and two years later acquired a 75% stake owned by the Mozambican state and in 2008 increased that stake to 85%.

Leaving the Mafambisse unit would be the result of the financial problems the group is facing in its home country, where it has bank debt of about 11 billion rand (US$767 million).

The group replaced four directors, including Mozambique’s Tomaz Salomão, who is due to step down on 30 September, and Louis von Zeuner will become Chairman of the Board, replacing Bahle Sibisi. (Macauhub)