• Hippo operates as an independent entity with its own management, finances, assets, and contracts, the provisional liquidation of Tongaat has no legal, financial, or operational impact on it
• In 1HY26, Hippo delivered 10% revenue growth, operating profit increase to US$24.5m, 10% higher sugar sales, and 61% export surge, maintaining 50.2% local market share
• Key constraints remain NRZ rail inefficiencies, exchange-rate distortions, water-supply shortages, and peak-hour power tariffs

Harare- Zimbabwe’s largest sugar producer, Hippo Valley Estates Limited, has moved quickly to reassure stakeholders that the provisional liquidation of its South African parent, Tongaat Hulett Limited (THL), will have no impact on its local operations.

In a statement released on 12 February 2026, the company confirmed that the joint Business Rescue Practitioners of THL have applied to the South African High Court to end business rescue proceedings and place the South African business into provisional liquidation.

The move became necessary after the proposed sale of THL’s assets to Vision Sugar collapsed, rendering the rescue plan unimplementable.

Hippo Valley Estates operates as a completely separate legal entity in Zimbabwe, with its own independent board, management team, financial structures, bank accounts, and operational systems.

The company’s assets, sugarcane estates, mills, and export contracts are ring-fenced and not part of the South African liquidation process. Production, harvesting, milling, and all contractual obligations continue without interruption.

The latest interim results for the six months ended 30 September 2025 (1HY26) reflect this resilience. Revenue grew 10% to US$112.9 million from US$102.6 million in the comparable prior period. Total sugar sales increased 10% to 202,029 tons, while export volumes surged 61% to 26,490 tons.

Operating profit rose a strong 79% to US$24.5 million, reflecting higher volumes, improved pricing, and the benefits of government measures against counterfeit sugar that helped recover domestic market share. Hippo now commands 50.2% of the local market and 49.8% of Zimbabwe’s sugar exports.

Profit after tax was slightly lower at US$17.5 million (from US$18.1 million) mainly because of a shift from a tax credit to a tax expense, but the underlying operational performance remains robust. Cash generation stayed solid, and the company reiterated its commitment to Zimbabwe’s agricultural sector and surrounding communities.

While the South African developments have understandably caused some market anxiety, they do not touch Hippo’s core strengths or its strategic independence. The real challenges facing the business are entirely domestic: chronic inefficiencies at the National Railways of Zimbabwe (NRZ), persistent exchange-rate distortions, water-supply constraints, and high peak-hour electricity tariffs.

NRZ’s inability to provide reliable cane and sugar transport has become the single biggest operational bottleneck. In the 1HY statement, CEO Tawanda Masawi described the situation as “phenomenal,” noting that the rail operator is currently incapacitated.

Hippo has been forced to rely far more on expensive road haulage, which has pushed up logistics costs and eroded margins.

The Auditor General’s reports and recent parliamentary inspections have repeatedly highlighted NRZ’s decades of underinvestment, corruption, obsolete rolling stock, and cash-flow crises  problems that are now directly hurting one of Zimbabwe’s most successful agro-processors.

Currency policy adds further pressure. Hippo sells much of its sugar at the official bank rate while buying inputs at parallel-market rates that are often 30% higher. This artificial mismatch squeezes margins and subsidises local sales at the expense of export competitiveness.

Water shortages from erratic dam and river supplies also threaten irrigation on the vast estates, while peak-hour power tariffs of 23 US cents/kWh force the company to run expensive generators during critical milling periods.

Despite these structural headwinds, Hippo has still delivered double-digit revenue growth and a near-doubling of operating profit. The company is actively lobbying for a modernised water-distribution system, greater off-peak power flexibility, and urgent rail rehabilitation under the Mutapa Investment Fund’s turnaround plan.

Management remains confident that once these domestic constraints are addressed, Hippo can push annual production well beyond 250,000 tonnes and further strengthen its position as the regional sugar powerhouse.

Thus, the provisional liquidation of Tongaat Hulett in South Africa is a South African story that stops at the border. Hippo Valley Estates enters 2026 financially sound, operationally independent, and commercially robust. Its latest results prove that the business is more than capable of weathering external shocks, provided Zimbabwe’s own infrastructure and policy challenges are tackled with the same urgency the company is showing in its day-to-day operations.

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