18 May 2017

Uganda: Government Issues Two Free Zone Licences

Kampala — Uganda Free Zones Authority (UFZA) has issued two development licences to M/s Nilus Limited and M/s Uganda Wood Impex Limited to develop free zones in Jinja and Kalungu districts in Uganda.

This brings the number of companies that have so far been licensed by UFZA to three. The first Free Zone Area in Arua was issued to Arua Special Economic Zone Limited (Arua SEZ) to develop a $12.7 million (Shs45.7 billion) free zone in Arua Municipality, Arua District.

A free zone is a special designated area where goods introduced into the area are generally regarded, so far as import duties are concerned, as being outside the customs territory. These include export processing zones or free port zones.

Speaking to journalists during the handover of the licences at UFZA offices yesterday, Ms Margaret Banga, the vice chairperson of the board of directors UFZA, said the Authority is finalising the national mapping exercise to identify sites for the suitable location of free zone areas in Uganda.

Ms Nilus Limited intends to undertake tobacco leaf processing for export to Europe, Asia and Middle East and Egypt. The projected capital investment for the zone is $10,597,606 (about Shs36 billion) and is expected to employ about 220 people. The company will also indirectly create employment to 14,500 farmers.

Mr Rob Kelsall, the managing director Nilus Limited, said in the first year of operation, they will process only Ugandan Tobacco Services Limited 2017 crop. This accounts for 27 per cent of the national crop.

"Nilus will only process the raw or green tobacco in to the processed or unmanufactured product which is then sold to the manufacturer who makes the cigarette. Nilus does not own aby tobacco or tobacco product in Uganda," Mr Kelsall said.

Ms Uganda Wood Impex, which was granted a licence for six acres in Kalungu District, will process essential oil and timber for export to China, United Arab Emirates and India.

Mr Dinesh Nair, the managing director M/S Uganda Wood Impex, said the timber and sandalwood will be obtained from South Sudan and democratic republic of Congo since there is limited supply of wood here in Uganda.

The company says it will source its raw materials locally and regionally but will source the lemon grass from outgrowers in Kalungu and Masaka districts. They intend to use modern technology in the production process of the essential oils and timber.

Mr Richard Jabo, the executive director UFZA, said the Authority will facilitate the companies to get all the necessary clearances from government Ministries, Departments and Agencies.

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