Tongaat’s land disposal strategy is ‘backward-looking’
Agriculture and agro-processing group should not have sold prime tracts in KwaZulu-Natal, says former investor
Listed agriculture and agro-processing firm Tongaat Hulett appears to be losing appeal with investors and, according to one former investor, the bad run is an indictment on the company’s leadership. Tongaat’s shares on the JSE have been on a losing streak, trailing the JSE all share index and the food producers index. Over the past five years, Tongaat is down 56.89%, while the all share index is up 16.57%. In the same period, the food producers index, which includes the likes of Clover Industries, Rhodes Food Group, Tiger Brands and Pioneer Foods, is up 1.13%. Tongaat’s shares were up 3.98% to R53.03 on Friday.
Chris Logan of Opportune Investments, a former investor at Tongaat, is critical of the company’s “backward-looking” strategy, whereby the company has invested a total of R11bn in the past 10 years while selling prime land. “Sugar is an industry of the past,” says Logan. Outgoing CEO Peter Staude says the company plans to sell between 600ha and 1,100ha of land over the n...