South African sugarcane growers have established a group aiming to secure funding to keep troubled industry giant Tongaat Hulett’s mills and refinery operational and avert its liquidation.The announcement comes just over a month after the state Industrial Development Corporation (IDC) committed a further R200m to prop up Tongaat Hulett, which has been fighting for survival after going into business rescue in 2022 after accounting irregularities, financial misstatements and governance failures.The IDC’s move led to the Durban High Court postponing the business rescuers’ liquidation application to allow for a long-term solution.The new group, GrowerCo, said on Thursday its proposal is built around the long-term sustainability of Tongaat Hulett and includes small- and large-scale growers as equity partners, in contrast to an extractive private equity model.It said its model is focused on maintaining milling operations, safeguarding jobs and preserving economic activity across rural KwaZulu-Natal. Tongaat Hulett supports between 35,000 and 40,000 direct jobs at farm level and at its mills and refinery, making it an economic anchor for entire rural communities in the province.“The future of KwaZulu-Natal is intricately tied to the future of Tongaat Hulett. The long-term economic and societal consequences of its liquidation would far exceed the liabilities on the company’s balance sheet,” said Pratish Sharma, a grower who supplies Tongaat Hulett’s Maidstone mill. More than 17,500 of South Africa’s 28,000 sugarcane growers supply Tongaat Hulett, most of them small-scale growers. “GrowerCo not only makes sense because it puts Tongaat Hulett under the ownership of people with a long-term commitment to the sugar industry in South Africa, it is also a beacon of what true economic transformation can be,” said Nicholas Ngobe, a grower supplying the Amatikulu mill. “Small-scale growers are equity partners in GrowerCo and will earn returns not only on their sugarcane but will share in equity growth over the long run. This creates the possibility that a sugarcane grower who today owns and farms their own land, but whose forebears may once have worked as indentured labourers in the province’s sugar fields, could become an owner in one of South Africa’s oldest sugar companies.” GrowerCo estimated debtors would be able to realise R3bn to R4.5bn for Tongaat Hulett if it is sold as a going concern, whereas value recovery during liquidation would be as low as R1bn to R1.5bn.“GrowerCo is a stakeholder-inclusive plan to avoid a liquidation scenario and to ensure Tongaat Hulett’s South African sugar operations can continue as a going concern,” Sharma said.“It has been designed by the people who supply the cane, operate the mills and depend on the industry, and is built around patient capital and a model of reinvestment. GrowerCo would also be a beacon of real transformation in South Africa by including small-scale growers at ownership level.” The IDC has injected R2.5bn into Tongaat Hulett since it went into business rescue.A consortium led by businessman Robert Gumede, the Vision Group, is also bidding to acquire the ailing company.