UASA Media Release: 17 March 2023
Statement by Abigail Moyo, spokesperson of the trade union UASA:
The financial challenges at Gledhow Sugar Company, based in Stanger, KwaZulu-Natal, are concerning against the background of South Africa’s unemployment crisis.
Gledhow might be unable to pay all its debts as they become due and payable in the following six months. Management has voluntarily entered into business rescue to save the company and prevent job losses.
The company’s financial distress springs from several economic challenges, including:
- The adverse consequences of the Covid-19 pandemic
- Effects of the unrest that occurred in Kwazulu-Natal in July 2021
- The substantial flood damage to the company’s factory and the general impact of the widespread flooding in the areas of the company’s operations and those of its suppliers in KwaZulu-Natal
- The unexpectedly lengthy process involving the assessment of the flood-related insurance claims and the acceptance of liability by the insurer, with not all insurance claims having been paid as yet
- The knock-on impact of the Russia-Ukraine War, which has resulted in significant increases in the costs of essential supplies such as coal, fertilizer and other essential operational inputs, which increases have not been recoverable by sugar price increases as a result of the pricing restraints imposed under the South African Sugar Master Plan, thus further exacerbating the company’s operating margin and cash flow constraints.
Unemployment remains a significant threat to South Africa’s economic growth, and we cannot afford the extra pressure of liquidations or business closures. UASA is pleased that Gledhow’s management has taken steps to ameliorate the financial challenges and save the company from further distress.
UASA encourages its members and all workers at Gledhow to keep the trust in their management. With the assistance of the business-rescue practitioner, the company will proceed with a business turn-around plan and secure funding to restore proper operations.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.