Maputo — The Mozambican government says it has found alternatives to keep two threatened sugar companies in production.
The companies are at Xinavane in Maputo province, and at Mafambisse in the central province of Sofala. The main shareholder in both concerns is the South African company Tongaat Hulett, which is in such dire financial straits that trading in its shares has been suspended on both the Johannesburg and London stock exchanges.
The company admitted in May that the financial results it posted for 2018 are unreliable. It had greatly overstated the value of its assets. The company's very survival is in doubt, and it has warned that it is likely to withdraw from Mozambique.
Cited in Wednesday's issue of the Maputo daily "Noticias", the Minister of Industry and Trade, Ragendra de Sousa, announced that investors interested in buying the two sugar companies visited Xinavane last Sunday and Mafambisse on Monday. "So we have the situation under control", the Minister claimed.
Now it was up to Tongaat Hulett to say what it needs to keep the two sugar mills and their plantations in operation. Sousa warned that "the Mozambican government doesn't want to handle situations of blackmail".
"If they want to leave tomorrow, then tell us the value of the assets, and the new investor will come in", said Sousa. "We have the guarantee that the new investor will not stop production even for a day and will not disturb the work force. So the government has the solution in hand".
He declined to reveal the identity of the new investor, for commercial reasons. "What I can say is that we have this investor, and there are others who are also interested in the two sugar companies", said Sousa. "What is missing is for the current investor to take a decision and say what it really wants. As a government, we are not going to tolerate blackmail any more".
Reports have circulated that Tongaat Hulett told its Mafambisse work force verbally that it intended to abandon the company, after the current sugar processing campaign. But Sousa said Tongaat Hulett must inform the government of its intentions.
Tongaat Hulett holds 85 per cent of the shares in the Mafambisse company and 88 per cent in Xinavane. The Xinavane mill is the largest sugar producer in Mozambique. It produced over 200,000 tonnes of sugar in 2018, and has the installed capacity to produce 250,000 tonnes a year.