Maputo.  — The South African company Tongaat Hulett, the majority shareholder in the Xinavane and Mafambisse sugar mills, in the Mozambican provinces of Maputo and Sofala respectively, has promised to invest about 500 million rands (about US$29,5 million to reactivate production.

The decision to make new investment came after a long period of uncertainty arising from possibly criminal mismanagement. Tongaat Hulett was in such dire financial straits last year that trading in its shares was suspended on both the Johannesburg and London stock exchanges.

The company admitted in May 2018 that the financial results it posted for 2018 are unreliable. It had greatly overstated the value of its assets. The company’s very survival was in doubt, and it warned that it was likely to withdraw from Mozambique.

The promise of new investment was made in Xinavane on Tuesday by the general manager of Tongaat Hulett in Mozambique, Tendai Masawi, when he presented a report on the activities of the Xinavane company to the chairperson of Mozambique’s Confederation of Business Associations (CTA), Agostinho Vuma.

Vuma is visiting several industries to check on the measures they are taking to prevent the possible spread of the respiratory disease Covid-19 among their workforce.

At Xinavane, he received the welcome news that the factory will not close. ‘‘We will not close either the Mafambisse or the Xinavane sugar factory’’, pledged Masawi. ‘‘The units will continue to produce. Tongaat Hulett has taken the decision not to close these sugar factories’’.

He promised Vuma that both sugar companies will launch their 2020 production on April 7. The target is for a total production of 213 000 tonnes of sugar, of which 60 000 tonnes will be refined white sugar, required by the confectionery and soft drinks industry.

‘‘We shall produce 175 000 tonnes of sugar at Xinavane and 38 000 tonnes at Mafambisse’’, he said. ‘‘We shall work on 18 000 hectares of sugar cane, involving 6 000 producers’’.

Vuma expressed his satisfaction at this announcement, and said that Tongaat Hulett’s decision showed confidence in the Mozambican market.

‘‘We were concerned at the situation of the two companies’’, he said, ‘‘because what they produce is part of the agro-business value chain. Sugar is a raw material for the drinks industry. We are pleased to hear that, on 7 April, the machines will start to roar again’’.

Tongaat Hulett holds 85 percent of the shares in the Mafambisse company and 88 percent in Xinavane. The rest of the shares are held by the Mozambican state through IGEPE (Institute for the Management of State Holdings).

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. — allAfrica.