The Honourable Minister of State for Masvingo Province
Dear Minister
THE INEQUITABLE COMPARISON: WHY SUGAR MILLING AND AGRICULTURAL INDUSTRIES CANNOT BE MATCHED
1.l have the honour to give a brief on the recent decision by Tongaat Huletts Zimbabwe to retrench workers, citing that they pay more than other players in the agriculture industry, is a misguided justification.
2.This argument is based on a flawed comparison between two distinct industries with different value chains, products, and revenue streams.
VALUE ADDITION AND REVENUE STREAMS
3.The sugar milling industry, represented by Tongaat Huletts Zimbabwe, produces a final product – packaged sugar – which is sold directly to consumers.
4.In contrast, the agricultural industry produces raw materials, such as sugarcane, which are then processed by the sugar milling industry.
5.This value addition creates a significant distinction between the two industries.
6.Furthermore, the sugar milling industry generates revenue from various by-products, such as molasses and stock feeds, which are sold separately.
7.This diversification of revenue streams is not present in the agricultural industry, where the primary focus is on producing raw materials.
8.Additionally, Tongaat Huletts Zimbabwe enjoys several advantages that contribute to its success, including:
a.Milling charges of 23% of every process done by anyone who brings cane to their mills.
b.Large landholdings that give them a greater capacity for production and revenue generation.
c.Established infrastructure, including rail cane carriage and dams, which was built during the colonial period using slave labor.
d.Multiple income streams from various businesses, such as hospitals, schools, and rail cane carriage
COMPARING APPLES AND ORANGES
9.It is unfair to compare the salaries of workers in the sugar milling industry with those in the agricultural industry.
10.The two industries operate in different markets, with different products, and different revenue streams.
11.The sugar milling industry’s value addition and diversification of revenue streams create a distinct advantage over the agricultural industry.
TRANSPARENCY AND FULL DISCLOSURE
12.If Tongaat Huletts Zimbabwe claims to be struggling financially, it is incumbent upon them to provide full disclosure of their financial statements.
13.Section 76 of the Labour Act requires employers to provide transparent and accurate information about their financial situation when alleging financial incapacity.
14.The company’s audited financial records are publicly available, and there is no justification for withholding this information from stakeholders.
15.Transparency and full disclosure are essential for good-faith negotiations and to ensure that workers are treated fairly.
CONCLUSION
16.In conclusion, the comparison between the sugar milling and agricultural industries is flawed and unjustified. The value addition, revenue streams, and products of these industries are distinct and cannot be matched. Tongaat Huletts Zimbabwe’s decision to retrench workers, citing unequal pay, is unfounded and lacks transparency.
17.We urge the company to provide full disclosure of their financial statements and engage in good-faith negotiations with stakeholders to find a fair and equitable solution.
18. I thank you.
Faster Gono
SG
CC
Permanent Secretary Masvingo Province
Permanent Secretary Ministry of Labour