The largest producers of sugar in Tanzania Kagera Sugar Limited, has acquired the sugar division of Tongaat Hulett Limited (THL) in South Africa and the investments in Zimbabwe, Mozambique and Botswana, with the new owners planning to “significantly” invest in modernisation and expansion of plants to increase production and efficiencies.
Kagera is part of a group of companies which are the largest producers of sugar in Tanzania and owns sugar assets in Tanzania, the Democratic Republic of Congo and the Middle East.
The business rescue practitioners (BRPs) announced in a statement, Friday, that Kagera had been selected as the preferred strategic equity partner (SEP).
“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,” said Nassor Seif, Managing Director of Kagera Sugar Ltd.
“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.
The Group is committed to investing significantly in the operations to modernise the plants and expand them to increase production and efficiencies,” he added.
Kagera was selected from a list of more than 70 parties who expressed interest in acquiring the business when the process to identify a strategic equity partner was started.
The list was narrowed down to eight that focused on acquiring the combined Tongaat Sugar Assets.
“After a rigorous process, we identified Kagera Sugar as the preferred candidate,” the BRPs said in a statement.
“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.
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.”
Additional information on the process and the preferred bidder will be reported to creditors in monthly reports and included in the updated business rescue plan.
