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Palm oil plant starts operations
Publish Date: Feb 22, 2010
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By Ibrahim Kasita

THE palm oil processing plant on Lake Victoria Island of Bugala has started operations, and will save Uganda more than $60m on vegetable oil importation.

The $10m facility, which crushes palm oil fruits into crude oil, also generates 1.5MW electricity for the estates and the island.

Kodey Rao, the managing director of Bidco, the investor, said the plant will be commissioned on March 7, by President Yoweri Museveni and will help alleviate poverty in the rural areas.

“The investment is expected to stimulate other economic activities in the country due to a multiplier effect,” he said.
Rao added that the project had started improving people’s livelihoods and in reducing the cost of importing vegetable oils.

“At full scale, the project will produce about 140,000 tonnes of crude palm oil and 14,000 tonnes of palm kernel oil annually, saving about $60m in foreign exchange that would be used for importation.”

Rao said the expected income will be sh2.5m per hectare per year.

Before the project, there was nothing on the island, Nelson Basaalidde, the Kalangala Oil Palm Growers Trust coordinator, said.

“We had no roads, electricity or water points.”
Basaalidde added that with the establishment of the project, “people will come to work here. Private investors have built hotels and we now have reliable transportation services to and from the mainland”.

The project is a component of the Vegetable Oil Development Project which was started by the Government to increase the production of vegetable oil.
It is a joint effort between the Government, the International Food and Agriculture Development (IFAD), the World Bank and Oil Palm Uganda.

The latter consists of Wilmar, a conglomerate specialised in plantation development and Bidco, an oil processing company.
The project will be co-funded by Oil Palm Uganda which will provide $120m while IFAD will give a loan of $19.9m.

The Government’s contribution is $12m for land, electricity and roads while the contribution from small holder farmers is $3.16m through labour, equity and land.

Rao said Bidco had utilised 5,650 hectares out of the 6,500 the Government had given them to cater for the nucleus estate.

Initially, an agreement was reached between the Government and Bidco to grant 10,000 hectares of land, out of which 3,500 was supposed to be under the outgrowers scheme.

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