Kayunga sugar factory gets license, promises 1,500 jobs
Uganda’s sugar production is currently estimated to exceed 800,000 tonnes annually, with Kakira, Kinyara and SCOUL producing about 380,000 tonnes. There are five major factories and dozens of smaller millers operating in the sector.
Issued on August 26 under Licence No. 054, the authorisation permits the investor to set up a sugar mill with a crushing capacity of 1,500 tonnes of cane per day (TCD). (New Vision/Files)
KAYUNGA - Government has officially licensed Shakti Sugar Limited to establish a processing plant in Kayunga District, bringing the total number of sugar factories in the country to over 15.
The facility will be located in Nalyamabidde Village, according to a licensing document shared on September 01 by the Local Government Minister, Balaam Baruhagara.
Issued on August 26 under Licence No. 054, the authorisation permits the investor to set up a sugar mill with a crushing capacity of 1,500 tonnes of cane per day (TCD).
The non-transferable licence remains valid subject to revocation by the trade minister or surrender upon request by the Sugar Cane Council.
Baruhagara said the approval followed endorsements from key sector officials, including the Trade Minister, Sanjay Tanna, and the Sugar Cane Council chairman, Rajbir Singh.
He noted that the development marks the establishment of the first sugar factory and major manufacturing industry in the Bugerere area in Kayunga.
“This is a major milestone for Bugerere, Kayunga and Uganda’s economic transformation. The factory will create direct employment for more than 1,500 young people and provide a market for over 5,000 commercial sugarcane farmers,” Baruhagara said in a statement issued on behalf of the company's directors and the local community on his X page.
Regulatory compliance
Uganda’s sugar production is currently estimated to exceed 800,000 tonnes annually, with Kakira, Kinyara and SCOUL producing about 380,000 tonnes. There are five major factories and dozens of smaller millers operating in the sector.
The Ministry of Trade, Industry and Cooperatives spokesperson, Hadija Nakakande, confirmed that Shakti Sugar Limited was among four factories recently licensed by the minister.
Nakakande said the expansion is beneficial to the sector as the new factories will create a wider market for sugarcane farmers.
“There are regulations for you to be able to get a licence. By the time the council recommended to the minister to give them a licence, they had fulfilled all the requirements,” she said.
She added that established procedures were followed, including requirements relating to raw material sourcing and the organisation of out growers.
Environmental, strategic concerns
David Katamba, a professor of Corporate Sustainability and Social Responsibility Management at Makerere University Business School (MUBS), commended the Government for the development, noting it will create jobs and boost foreign exchange through regional exports.
“Previously, the standard was to have at least one factory in every 50 kilometres to create enough catchment area for the supply of raw materials and give room for the growth of other crops,” Prof. Katamba said.
He warned that the proximity of factories to each other could trigger food insecurity as farmers convert all available land to sugarcane, alongside sparking unhealthy competition.
Prof. Katamba also raised environmental alarms, noting that concentrating factories in one area leaves little room for effluent and smoke to dissipate, which could have future health repercussions on surrounding vegetation and forests.
Industry reaction
John Mukasa of Kakira Sugar Works said existing players have no problem with new entrants as long as they meet the set requirements.
“The problem is the raw materials. You must have land. That is why, as the association, we guard this space well. You have to develop your outgrowers,” he said.
He, however, expressed concern that increased competition for sugarcane could push production costs higher.
“Every time raw materials go up, the price of sugar also goes up,” Mukasa warned.