Tycoon Robert Gumede says South Africa's sugar industry must pivot to ethanol and electricity or risk becoming irrelevant

Robert Gumede has a straightforward diagnosis of what is wrong with South Africa's sugar industry: it has been thinking too small for too long.

Speaking to Business Day on the sidelines of the Africa Forward Summit in Nairobi, Gumede said South Africa had focused too narrowly on sugar as a product for household consumption and food manufacturing, while countries such as Brazil and Thailand had built broader industries around fuel and power generation. "The truth is this is an industry that employs more than 250,000 people. It is a much bigger role rather than just being seen as an industry that produces sugar that we use on our tables. The master plan must talk to the automotive industry and to energy," said Gumede, who chairs the Vision Sugar Consortium, which is seeking to acquire Tongaat Hulett out of business rescue.

His remarks came as the government's second phase of the Sugarcane Value Chain Master Plan to 2030 is being implemented following its signing in April. The plan leverages a 300,000-tonne annual sugar surplus to supply a national biofuel mandate targeting a 4.5 percent blend, aiming to reposition sugarcane as an energy resource rather than a simple agricultural product.

The second phase emphasises diversification beyond sugar and molasses into biofuels, sustainable aviation fuel and bioplastics. The industry says South Africa's sugar tariff, unchanged since 2018, no longer protects local producers from subsidised imports, with Brazil as the main source of competing product. Industry leaders say subsidised imports force South African producers to export sugar at a loss, hollowing out the commercial case for continued investment in local production.

Gumede's Vision Sugar Consortium is the most direct stakeholder in that debate. The group is the largest secured creditor in Tongaat Hulett's business rescue, with a claim of approximately R11.7 billion, and is fighting to take ownership of the assets before a June 17 court deadline brings liquidation back into play. Vision has floated a plan to diversify Tongaat Hulett beyond sugar, including turning the business into a renewable electricity producer that taps the mills' existing power assets and shifting toward high-value ethanol production.

In a separate opinion piece published this week, Gumede described those plans as commercially viable rather than aspirational. "Vision's strategy for the Tongaat Hulett assets includes generating electricity from bagasse, which is sugarcane residue, for the national grid and the Durban municipality, as well as a shift toward high-value ethanol production. These are not speculative ideas. They are commercially viable diversification strategies that can reduce dependence on volatile export sugar markets and create new revenue streams. But they require regulatory support, licensing frameworks and, in some cases, off-take agreements with state entities. Government needs to fast-track these enablers, not slow them down."

The stakes are significant. Tongaat Hulett employs thousands of workers directly across its KwaZulu-Natal milling operations and supports tens of thousands of smallholder sugarcane growers whose livelihoods depend on the mills buying their crop. A liquidation would be among the most consequential single corporate failures in South African agricultural history, both in direct job losses and in the ripple effects through the broader cane-growing economy of the province.

Gumede's argument at the Nairobi summit is that the government's support for biofuel mandates and the diversification push in Phase 2 of the master plan creates exactly the policy environment his Vision Sugar plan needs to work. Government is reviewing the industry's tariff application, with the sector hoping for an outcome by the end of May. Industry representatives say recent government engagement suggests growing support for the sugar sector's diversification agenda.

Whether those mandates and regulatory frameworks are formalised quickly enough to provide Vision Sugar the commercial certainty it needs to close the Tongaat Hulett rescue before June 17 is now the critical question. Gumede is making the policy argument publicly while his legal team prepares the creditor case in court.