BUSINESS NEWS - The human impact of the huge financial meltdown faced by sugar giant Tongaat Hulett bit this week, when 210 families living in the company compound were told to pack their bags.
They are but a fraction of the 5 000 people who have been handed notice since the company, the largest employer on the North Coast, began stringent cutbacks to avoid financial disaster.
A general feeling of resignation was evident this week at the Maidstone Mill. The 210 workers living at the Tongaat compound have also been served with eviction notices to vacate their homes at the same time.
Farm workers in the surrounding farms also face losing their jobs. However, workers with children attending local schools have been granted a reprieve in their eviction notice until the end of November to accommodate their children’s final term of exams and the completion of their school year.
The Courier visited Tongaat this week, where the company has its headquarters, and spoke to the displaced workers at the mill and compound.
Many are still in shock and said they did not know what they were going to do.
Many of the workers have been with the company since leaving school and are facing insurmountable challenges as unemployment in a stagnant economy continues to challenge the region.
With South Africa’s 27.6 percent unemployment rate in the first quarter of 2019, an amount that equates to 6.2 million people unemployed, many of the workers face a bleak future.
A worker with 28 years of service spoke to the Courier on his eviction and Section 189 retrenchment notice, which is effective at the end of September.
“I have refused to sign the eviction letter as they have not given me enough time to look for other accommodation.
“As soon as my notice period ends at the end of September my family and I have to pack up and leave.
“It’s bad enough that I will be without a job but also without a roof over my family’s head.”
Another employee with over 10 years of service said he was hoping to find work in the construction industry and was planning to move to the nearby shack settlement.
In a shareholder note issued May 31, Tongaat Hulett said an ongoing financial review had revealed that “certain past practices” did not reflect the company’s business performance accurately.
The company’s equity (the value of the business after liabilities) in its 2018 financial results had been overstated by between R3.5 billion to R4.5 billion.
Industry experts have claimed that the sugar market has been in crisis for more than 10 years now, and in South Africa specifically, sugar production has dropped by around a third between 2002 and 2012.
Illovo Sugar reduced its workforce by 25 percent between 2009 and 2014 and three successive droughts have had a significant impact on cane production.
In addition, the impact of being in a global economy has reared its ugly head with cheap imports flooding the local market making it virtually impossible for local producers to compete.
The industry employs 85,000 people directly and 350,000 indirectly through food processing and other sectors.
Provincial secretary of the Food and Allied Workers Union (FAWU) in KZN, August Mbhele, said while the union had engaged with the company there had been no further correspondence since June.
Workers were issued with their severance pay letters on Monday.
Their employment officially terminates September 30.
Tongaat Hulett spokesperson Michelle Jean-Louis confirmed that “notice of retrenchment and appropriate severance packages” had been issued to a number of workers on some of the farms, but declined to provide details on the eviction notices.
“To ensure that land which has been targeted for future property development remains productive under sugarcane, numerous farms will transition through creating opportunities for third-party growers to farm company-owned land,” she said.