AGRO EcoEnergy Tanzania has encouraged out growers around its estate to organize themselves into viable commercial companies in order to benefit from its expertise and large-scale investment in sugar production in Bagamoyo District.
In an interview with the 'Daily News' in Dar es Salaam yesterday, the Managing Director, Mr Anders Bergfors, said they preferred about 1,500 farmers who live around their estate to organize themselves into farming cooperatives with each owning at least 100 hectares, in order for them to be viable partners of the recently established large-scale sugar processing company.
The company has 7,000 hectares in Bagamoyo but out growers can add at least 3,000 hectares to the land available for its operations. "We want out growers to organize themselves into small companies with about 100 hectares per farmer. We will have commercial contracts with them," he told the 'Daily News.'
"This addition of 1,500 out growers is about wealth creation and not poverty reduction," he emphasized. He noted that productivity would improve three to four times if they improved the knowledge of the farmers.
"We are educating them on possibilities and the options on developing their land as our plant can absorb more out growers than we currently have," he said. Agro EcoEnergy Tanzania expects to produce 125,000 tonnes of sugar per year, slightly more than a quarter of the country's current needs of 400 tonnes a year when their factory would be running at full capacity in 2015.
The company also will generate 30 MW of electricity, half of which will be sold to the national grid. He said they have decided to put more emphasis on sugar production because it currently makes more sense to produce the commodity than going for ethanol distillation.
"That is how Brazil works today. Sixty per cent goes to sugar while 40 per cent goes to ethanol depending on market demand," he said. He said they would give 100 per cent attention to sugar production and build a small distillery for 40 per cent ethanol.
He said that for their Bagamoyo operations, ethanol would be used for branding with gasoline for the local market. The project will also produce up to 15 million litres of ethanol primarily for the domestic market, he said.
The company plans to build a sugar factory capable of processing 5,000 tonnes of sugarcane per day along with an ethanol plant at its Greenfield site located at Wami Basin, about 100 km north of Dar es Salaam. According to the Biofuel Project Co-ordinator in the Ministry of Energy and Minerals, Paul Kiwele branding oil with ethanol would lower fuel prices by 10 per cent.