A consortium of a Zimbabwean businessman, a South African billionaire and a Pakistani sugar producer is now in charge of Zimbabwe’s largest sugar producer.
Tongaat Hulett, which runs the Hippo Valley and Triangle estates in the Lowveld, went into business rescue in October 2022 to prevent bankruptcy. This was after a fraud by its executives left the company with debts of R12 billion.
Last year, Tongaat’s administrators announced that they were selling the company to Kagera, a Tanzania sugar producer. However, this fell through after court challenges by other bidders. The Zimbabwe government also criticised the Kagera deal, saying it had been denied a chance to take over the estates, which it sees as a strategic asset that must be in friendly hands.
Last Thursday, Tongaat credits voted for a new buyer, the Vision Group. The consortium will take over 97.3% of the company by taking over about R8 billion of the company’s debt.
Here is what we know about some of the members of the consortium.
Rutenhuro Moyo’s Remoggo
Remoggo is Moyo’s investment company, registered in Mauritius. According to the Tongaat administrators, Remoggo is invested in “retail, agribusiness, logistics, and facilities management services in Zimbabwe and seven other African countries”. Moyo has been on the Hippo Valley board since 2020. He is also chairman of ZSE-listed company National Tyre Services and sits on the boards of FBC Holdings and OK Zimbabwe. He has had past roles at South Africa’s Shanduka Group, leading its interests in Coca-Cola SA and McDonalds SA. In December, it was reported that he had invested US$420,000 into Jamboo, a tech start-up planning to launch digital banking services to the African Diaspora.
Robert Gumede: Guma Agri and Food
South African billionaire Gumede is part of the consortium through its company, Guma Agri, a unit of his Guma Group. Gumede has had previous interests in Zimbabwe through Gijima, an IT company. He visited Zimbabwe in 2018, meeting President Emmerson Mnangagwa and saying he was seeking investment in the country.
Almoiz is one of Pakistan’s biggest sugar producers. It operates five sugar mills which produce 650,000 tonnes of refined sugar every year. Within the Almoiz group is the largest Pepsi franchise in Pakistan, which buys sugar from Almoiz. The company’s founder, Nauman Ahmed Khan, has previously worked for Pepsi.
The company is owned by businessman Amre Youness. The businessman heads Terris, the biggest shareholder in Samancor, one of South Africa’s biggest chrome producers. Previously, Youness has represented the Eurasian Natural Resources Corporation, which had mining interests in Zimbabwe.
Plans in Zimbabwe
According to the business rescue document, Tongaat executives have briefed Mnangagwa on the transaction.
“In Zimbabwe, the head of State has been kept updated through in-person briefings on the progress of the business rescue by the local Chairman and interim (Tongaat Hullet Limited) CEO,” the report says.
Tongaat’s main concerns in Zimbabwe are land tenure, cheap sugar imports and rising costs.
“The poor economic outlook is exacerbated by the suspension of duties on basic commodities including sugar, which resulted in lower cost imported sugar (which has unfair cost advantages) competing against locally produced sugar. This is slowing down sales significantly domestically, which is the preferred market, with the lost sales volumes being redirected into lower-priced export markets,” Tongaat says.
“Government interventions in respect of grower issues” and a new minimum wage of US$280 set before elections last year “had a significant impact on the cost base and cash flow of the business.” The lack of security over land tenure “due to the 99-year leases not signed creates further uncertainty”, Tongaat says.
In the six months to September, Hippo Valley sold 203,756 tonnes of sugar, almost 53% of all the sugar sold in the country.