New Vision (Kampala)

26 January 2013

Uganda: Kaliro Sugar Factory to Ease Sugar Deficit

LOCAL sugar production is set to increase with the soon-to-be commissioned Sugar Allied Industries factory in the eastern district of Kaliro in efforts to close production deficits that have driven up prices in recent years.

The sugar factory is one of eight new ones promised by the Ministry of Trade at the end of 2011, when an acute shortage in sugar production forced prices up by more than 200%.

Sugar Allied Industries is a subsidiary of the Uganda based, East African conglomerate Alam Group of Companies.

The factory will start with an initial production capacity of 2,000 tonnes of crushed sugarcane per day, similar in capacity with the Lugazi Sugar Works factory, yet smaller than the 6,500 tonnes of crashed sugar cane facility at Kakira Sugar Works.

Abid Alam, the Sugar Allied Industries boss, pointed out that the factory will also generate up to 12MW of electricity from the bagasse waste. This is the same amount of power generated at the Kakira Sugar Works.

"We are following the National Sugar Policy and we have been issued an independent zone by the ministry of trade. We have about 20,000 acres of sugarcane to supply the factory," he said.

The Sugar Allied Industries factory is step closer to achieving the goals of the five-year national sugar policy 2010 that aims to increase sugar production to 480,000 metric tonnes, with a per capita consumption of 14kg, electricity generation of 90-95 megawatts and employment of over 210,000 people.

Alam revealed that the $50m (sh133b) sugar factory will be officially commissioned in April.

Jim Kabeho, the Uganda Sugar Cane Technologists Association (USCTA) chairman, said the new factory will reduce the daily sugar production deficit of 50,000 metric tonnes.

"All sugar companies produce just 300,000 tonnes of sugar, yet demand is high at 350,000 tonnes. There is still a lot of unfulfilled demand in the country," he explained.

A shortage of sugarcane at Kinyara sugar works sparked an increase in sugar prices in 2011, prompting the trade ministry to import 40,000 metric tonnes of duty free sugar to stabilise prices.

Data from the Uganda Sugar Cane Technologists Association indicates that total local sugar production by Kakira, Kinyara, Lugazi, Mayuge and GM sugar plants is projected to have increased 3.56% to 329,500 metric tonnes in 2012, from 266, 910 metric tonnes a year before.

Despite the increases in the amounts of sugar produced, a deficit of 46,649 metric tonnes still exists with a per capita consumption of 10.5%, highlighting the need for additional factories.

Amelia Kyambadde, the trade minister, revealed at the recent monthly trade ministry media briefing that seven sugar factories in addition to the Sugar Allied Industries factory had been licensed in the year 2011.

The list includes 2,500 Tonnes of Canes per Day (TCD) factory in Masindi by Mukwano Group, Tirupati Development Company factory with a 2,500 TCD capacity in Nakasongola and Uganda Crop industries with 200 TCD capacity in Buikwe.

Others include Kafu Sugar 800 TCD in Masindi, Kamuli Sugar 200 TCD in Kamuli, Kenlon 500 TCD in Namasagali and Bugiri Sugar Company 500 TCD in Bugiri.

This will bring to 15 the number of licensed sugar factories in the country. A kilogramme of sugar is selling for between sh3,500 - sh4,000 at the retail level, from highs of sh8,000 in 2011.

The developments are expected to translate into higher prices for sugarcane out growers and lower sugar prices for consumers in the long run. The Kinyara Sugar Workers Union revealed that out growers are now receiving sh66,000 per tonne of suga cane, up from sh61,000 per tonne five months ago.

At the same media briefing, Silver Ojakol, the commissioner for external trade in the trade ministry, said a formulae has been created within the National Sugar Policy to ensure that sugarcane out growers receive fair payments.

"When the domestic prices of sugar go up, provisions have been made through a formula in the policy to ensure that the farmer, sugar miller and consumer are protected," he explained.

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