George Maponga in Masvingo
A top Tanzanian sugar producer, Kagera is set to acquire Zimbabwe’s sugar division of Tongaat Huletts Limited (THL) after being selected as the strategic equity partner to help in efforts to turnaround the South African-headquartered firm’s sucrose operations in the region.
The partnership is expected to save thousands of jobs.
Tongaat’s business rescue practitioners (BRPs) today, announced Kagera Sugar Limited, the third largest sugar manufacturer in Tanzania as a strategic equity partner in a transaction also expected to breath oxygen in the lungs of the company’s sugar production operations in South Africa, Mozambique and Botswana.
In an update on Tongaat Hulett Limited’s business rescue, the BRPs revealed that the proposed transaction ”will comprise the acquisition of the complete sugar division of Tongaat Hulett Limited (THL) in South Africa and the investments in Zimbabwe, Mozambique and Botswana (Tongaat Sugar Assets).”
They said the selection of Kagera was a meticulous exercise that saw an initial band of more than 70 parties being whittled down to just one candidate, Kagera, that got the nod owing to its financially sound position and prospects of further technical breakthroughs owing to the Tanzanian firm’s international exposure in sugar manufacturing whose reach also extends into the Middle East.
”We started the process with a list of more than 70 interested parties, which was narrowed down to eight that focused on acquiring the combined Tongaat Sugar Assets. After a rigorous process, we identified Kagera Sugar (Limited) as the preferred candidate. The group is financially sound, with a solid track record. Its exposure to complementary sugar assets in Tanzania and the Democratic Republic of Congo offers relevant technical and operational knowledge to assist the turnaround of THL’s South African sugar assets,” said the statement.
”In addition, the sugar refineries in Oman and Bahrain will provide access to world-class technologies and expertise to improve efficiencies.”
”Continuing to operate Tongaat Sugar Assets as a combined multi-country group will ensure continuity for the operations in Mozambique, Zimbabwe and Botswana. It will also provide the South African business with access to technical capability to improve and to retain jobs in KwaZulu-Natal and to protect the livelihoods of several stakeholders across THL’s value chain, including that of the group’s many small-scale growers,” added the statement by the BRPs.
Managing director of Kagera Sugar Ltd, Mr Nassor Seif is quoted as having expressed conviction that the latest acquisition augured well for his firm’s plans to be at the pinnacle of sugar production on the African continent.
”The acquisition is in line with the group’s overall strategy to expand its operations throughout Africa, and its vision of becoming a leading sugar producer on the continent. We will extend the core values that have resulted in the success of our Group companies to the new Southern African operations to benefit employees, growers and ultimately the economy of the region,” said Mr Seif.
The BRPs disclosed that additional information on the Process (acquisition by Kagera) and the preferred bidder will be reported to creditors in monthly reports and included in the updated business rescue plan.
Tongaat Huletts owns Zimbabwe’s sole sugar mills at Hippo Valley and Triangle with an annual installed capacity of 630 000tonnes and together with commercial out-grower commercial farmers own cane lands straddling nearly 50 000 hectares in the Low-veld.