South African billionaire Robert Gumede plans to turn Tongaat sugar into power and fuel

South African billionaire Robert Gumede plans to turn Tongaat Hulett, the 134-year-old sugar producer his consortium rescued from liquidation this year, into an energy business that squeezes electricity, fuel and industrial gases out of a single sugarcane crop.

In an interview with Semafor, Gumede said his group, Vision Sugar, would build three revenue streams around the cane. He wants to burn leftover stalks and fibre to generate electricity, convert carbon dioxide from sugar processing into medical oxygen or beverage-grade gas, and turn cane into ethanol that can be blended into petrol. Sugar itself, he said, would become the cherry on top rather than the whole business.

The plan is a bet that diversification can fix an industry that pure milling no longer supports. Gumede said Tongaat lost about $36 million last year as a wave of cheap Brazilian imports undercut local producers. Industry data show more than 111,000 tons of imported sugar landed in South Africa in the first three months of the 2026/27 season alone, close to half the previous season's total.

Vision Sugar wants to grow the operation rather than shrink it. Gumede said he plans to expand the grower base from roughly 17,500 to more than 30,000 farmers and to double the roughly 50,000 jobs tied to the business.

The electricity leg rests on the mills themselves. Gumede proposes upgrading boilers and building biomass-fired generation that can sell power into the national grid and directly to municipal buyers such as eThekwini, the metro around Durban that is home to sub-Saharan Africa's busiest port. The gas leg would process carbon dioxide and other by-products into medical oxygen and beverage-grade gases, with Gumede eyeing offtake deals with suppliers including Afrox, the continent's biggest industrial gases group.

The ethanol leg leans on examples abroad. Gumede has pointed repeatedly to Brazil and Thailand, which turn cane into vehicle fuel and use the fibrous milling residue known as bagasse to make electricity. He has noted that Zimbabwe has blended ethanol into its fuel since 1975 while South Africa has used almost none. The government's latest sugar master plan, signed in April, targets a 4.5 percent ethanol blend using a 300,000-ton annual surplus, a policy shift Gumede says his plan is built to exploit.

The financing, he said, is manageable because the regional operations already make money. Gumede described landholdings of roughly 140,000 hectares in Zimbabwe and 300,000 hectares in Mozambique, and said those assets and their cash flow can bankroll the turnaround of the South African business. The Zimbabwe operation generated more than $60 million in profit in the year to March.

Vision Sugar took control of Tongaat in June, ending a rescue saga that ran for months. Gumede's group had bought out about $710 million (R11.7 billion) in debt owed to the 13 banks exposed to Tongaat, becoming the company's largest secured creditor. When sale agreements lapsed in February, Vision demanded immediate repayment, triggering a liquidation application that came within hours of ending Tongaat's operations before a deal with the state-owned Industrial Development Corporation pulled it back.

Under that deal, Gumede's Guma Group and the IDC hold 68 percent of Tongaat's South African operations, while Zimbabwean dealmaker and former Coca-Cola executive Rute Moyo controls 64 percent of the Zimbabwean business. The Mozambican government holds 15 percent of the Mozambique unit. The transfer of ownership must be completed by the end of September.

The stakes reach well beyond one company. A collapse would have put about 250,000 jobs linked to the cane-growing economy at risk across KwaZulu-Natal and Mpumalanga, along with thousands of direct jobs at Tongaat, because cane cannot travel far before it degrades and the region's remaining milling capacity is already committed.

Gumede has been pressing governments for protection against imports. He said he told Zimbabwean President Emmerson Mnangagwa in a recent meeting that the region must adopt the trade defences used by larger economies if it wants to protect rural livelihoods. South African Canegrowers has demanded stricter rules against subsidised sugar from Brazil and Thailand and pushed for biofuel mandates as basic economic defence.

Gumede built his fortune through Gijima, the technology company he founded in 1995 and still owns, before expanding into mining, energy, infrastructure and now agribusiness through the Guma Group. His net worth has been estimated at between R3 billion and R4.44 billion. He is not without legal overhang, with the Special Investigating Unit pursuing a claim tied to a pandemic-era protective equipment contract that he is contesting.

Whether the pivot works will hinge on execution and on how quickly Pretoria moves on tariffs and biofuel rules. Gumede is framing the sugar itself as almost incidental. The real prize, in his telling, is turning a distressed miller into a regional supplier of power, fuel and gas.