9 April 2013

Uganda: Factories Ask Govt to Implement Law On Sugar

Sugar producers have asked the Government to operationalise the sugar policy that was enacted in 2010 to prevent unfair competition and staff poaching.

The chairman of the Uganda Sugar Manufacturers Association, Mwine Kabeho, noted that despite the existence of the policy, the trade ministry continues to issue licences for the establishment of new sugar factories in the vicinity of the existing ones, in contradiction of the law.

Speaking at the 5th East Africa Sugar Industry stakeholders meeting at Sunset Hotel in Jinja last week, Kabeho noted that failure to enforce the policy causes 'poaching' by some factories.

The law, among other things, prohibits the establishment of new sugar factories within a distance of 35 kilometers from the existing ones.

Earlier, while presenting a paper on sugar production and consumption in Uganda, Dr. M.R Reddy, the agricultural manager of Kakira Sugar, revealed that the Government had issued 13 licenses for the establishment of new sugar industries.

Kabeho identified the lack of a policy to guide diversification in the existing factories and the need to develop more research centres in the sector as some of the problems facing the industry.

Delegates from Uganda, Kenya, Tanzania, Burundi and Rwanda also cited the high cost of inputs, punitive tax regimes and diminishing land due to urbanisation as the other challenges facing the sugar industry.

Rosemary Mkok, the chief executive officer of the Kenya Sugar Board, stressed the need to strengthen the legal framework and infrastructure development to reduce the high cost of production.

She noted that with additional mills to the 11 operational ones in Kenya, more competition for raw materials is expected which will push sugar prices higher.

Mkok also cited the declining cane yields as a result of continuous land use and the high demand of canes as another factor to watch out for.

Mkok said there are 250,000 small holder farmers in Kenya who contribute 90% of the canes consumed by the 11 mills. Only 10% of cane is got from nucleus factory estates.

Agriculture state minister Prof. Zerubabel Nyiira, challenged factories to diversify into the production of fertilisers, electricity and insecticides.

"This will help satisfy your demands, as well as those of other sectors of the economy," he advised

Nyiira also emphasised the need for governments of the East African Community to harmonise policies on sugar production.

Members resolved that the meetings be held annually in the first two months of the year and on a rotational basis. The next one will be held in Tanzania.

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