HARARE – South Africa-based Tongaat Hulett (Tongaat)’s chief executive Peter Staude says he has had sleepless nights over Zimbabwe’s indigenisation programme.
His sugar-producing company, which holds a 50,3 percent shareholding in Hippo Valley Estates while it wholly owns Triangle Sugar, is under pressure to comply with Zimbabwe’s empowerment policy.
The policy — enacted in 2010 — compels all foreign firms to cede at least 51 percent shareholding to black locals.
“I have to drink some Disprins at times,” Staude said referring to a threatened land indigenisation claim, adding that it ended up being a “storm in a teacup”.
Staude noted that despite Hippo publishing interim results that showed a sharp decline in turnover and profits in the six months to September 2013, he remained confident that the group’s indigenisation plans would be approved soon.
Early this year, Tongaat was threatened with takeover for alleged failure to comply with the empowerment law.
In April, then Indigenisation minister Savior Kasukuwere said the sugar producer would be barred from operating in Zimbabwe if it failed to comply with the country’s indigenisation regulations.
“Tongaat Hulett is a major cause for concern. They don’t respect the laws of the country and that is unfortunate. Come July, they will not be planting cane in Zimbabwe, maybe they will be in Durban,” he said, adding that “those who don’t want to comply must pack and go.
“They (Tongaat) are a big company, it is fair they respect the laws of the land. We are not against their investment, but their bad attitude.”
In the company’s interim financial report, Staude said overall sugar production for this season was expected to be at its highest level in a decade.
“Total sugar production is well on track to increase from 1 254 million tons of raw sugar last year to between 1 366 and 1 408 million tons this season, with the increase this year coming from South Africa,” he said.
The company has operations in South Africa, Swaziland, Mozambique and Zimbabwe.