Tongaat Hulett to cut jobs, salaries

Sugar producer, Tongaat Hulett is to cut jobs in the next few months as the drought-hit agro-processing firm whose half-year profits declined by 10 percent to R1,36 billion battles declining profitability from its South Africa and regional operations, forcing it to embark on a cost-cutting programme to save cash. In the past two years, Tongaat Hulett carried out cost saving measures that helped it conserve R950 million.

However, input price increases and the most severe drought in several years in South Africa has forced it to pursue further cost-cutting initiatives in the next six months.

This will affect areas such as employee salaries and wages, transport, marketing and other goods. The company has also been hurt by lower sugar prices for its exports into the European Union market.

Tongaat Hulett chief executive officer, Peter Staude said that an overall reduction in goods, services, transport, marketing, salaries and wages costs in real terms is expected this year.

Saude said Tongaat Hulett's reduced sugar output for the half year period ended September 30 had been "driven by poor growing conditions, particularly in South Africa.