Soroti Fruit Factory decries funding delays

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The Parliamentary committee on trade and industry has questioned officials from the Uganda Development Corporation (UDC) over delays in disbursing shillings 20 billion capital development fund intended for the operations of the Soroti Processing Fruit Factory.

UDC representatives explained that a memorandum of understanding (MoU) was signed with Chimaki Agro Ltd, a private investor designated to manage the factory’s operations, on May 21, 2024.

Under this agreement, UDC was to inject $10.7 million (about shillings 42.265 billion) as the capital development fund, in addition to covering an operation and management fee for Chimaki.

During the House committee visit to the factory on October 6, 2025, Maria Tsega, the chief executive officer in charge of Marketing for the factory, said the Uganda Government has delayed the release of operational funds for over 11 months, severely impacting project timelines and overall operations.

Tsega noted that UDC had provided only $5 million (about shillings 20 billion) in working capital around July 2025, while an outstanding $5.7 million (about shillings 22.26 billion) remains unpaid. The ensuing delays have made obtaining necessary approvals difficult and hindered the progress of various projects that were scheduled for implementation.

“We have been attempting to resolve this matter even at the president’s office, but so far, we have not achieved success,” Tsega told the committee.

The MOU

After the factory was handed over to the private investor on June 1 last year, a UDC official stated that shillings four billion was immediately allocated as a management fee to Chimaki.

Ollen K. Wanda, a senior UDC official, explained that per presidential guidance, UDC was to provide shillings 22.26 billion out of the total 42 billion, with the Ministry of Science and Technology covering the remaining 20 billion.

Wanda further mentioned that upon receiving the allocation from the Ministry of Finance in September 2024, UDC disbursed sh22.26 billion, and the Ministry of Science confirmed that it released its share of sh20 billion to Chimaki around May of this year.

However, the committee, chaired by Prof. Elijah Dickens Mushemeza, the MP for Sheema South Constituency, expressed concern over UDC's lack of transparent communication, emphasising that they rely on UDC for accurate information.

The committee expressed concerns about the potential ramifications of partnering with an operation management firm while failing to uphold commitments.

“If we don’t meet our obligations, we risk letting them down. Has this funding simply vanished? It’s curious that UDC lacks clear information, considering you are our source of insight,” they remarked.

The committee noted that UDC should have inquired about the funds claimed to have been released by the science and technology ministry, particularly since the agreement between UDC and Chimaki might not include awareness of the contract with the science ministry. 

“The Memorandum of Understanding is established between UDC and the private investor. The investor is anticipating the $10.7 million from UDC. If you allocate that money differently, it could affect the agreement with Chimaki, even if they are aware of the situation. Should they assert that you have violated the MoU, they would have grounds to do so, and it would be you, not the ministry of science, who is held accountable. If the money was indeed released, it’s up to UDC to provide clarity,” they added.

Tsega interacting with Prof. Mushemeza shortly after the meeting. (Credit by Emmanuel Alomu)

Shillings 300 million spent in repairs

Further complicating matters, the investor highlighted having spent over shillings 300 million on maintaining the plant and upgrading equipment, which had reportedly been neglected for five years prior to their takeover.

In response, a UDC official contended that they had been engaged in machinery upkeep since its installation. This ambiguous explanation left the committee questioning the whereabouts of the maintenance funds since the factory's inception.

In light of this, the members suggested that UDC compile a structured written response for the committee.

Challenges and risks

Several challenges and risks were identified, such as soaring input and production costs, the capacity of farmers, seedling quality, policy gaps that hinder the adoption of local fruit concentrates, and weak local supply chain capabilities.

Chimaki appealed to the government for timely disbursement of approved funds, better policy alignment to promote the use of Ugandan concentrates, and enhancements in infrastructure and tax incentives to improve competitiveness.

The investor emphasised that without a co-ordinated approach to address these critical issues, the factory's goal of transforming from low-capacity operations to a research-oriented, high-efficiency enterprise would face significant delays, limiting tangible progress in the near term.

Boniface Okot, the vice-chairperson of the committee, emphasised the importance of the factory's role in boosting employment and supporting farmers, particularly those facing low prices.

He highlighted the need for the factory to contribute positively to the Ugandan economy by producing high-quality juice and adapting to climate change through the introduction of new varieties and extensive research, including exploring alternatives like African Palms.

As the youth MP for Northern Uganda, Okot stated that these key points would be documented in their report to be presented to Parliament, along with budgetary recommendations.

Improvements

On a positive note, the new management of the factory has reported significant improvements since taking over. They have successfully marketed their juice products across all regions, including exports to Kenya, South Sudan and Tanzania.

The factory's processing capacity has expanded from 1,000 to 3,034 tonnes annually, while the ready-to-drink output has more than doubled to over 356,948 cartons per year.

The operational output has surged by 195%, and the unit cost for some products has decreased by more than 50%. Additionally, annual operational costs have been reduced by 108 million shillings due to enhanced energy and water efficiency.

Improvements in production are attributed to better processing techniques, a more optimised workforce, efficient procurement, and greater integration in sourcing materials.

Moreover, the new management has invested 300 million shillings in vital maintenance and technology upgrades, bolstering operational efficiency and ensuring compliance with international standards.

Remarkably, rejection rates dropped from 80% to below 2% for mangoes and to 0.9% for oranges. Raw material intake has also seen a considerable increase, now at 3 million kg of oranges and 4,000 metric tons of mangoes sourced from Ugandan farmers.

The factory has created 150 direct jobs and 5,500 indirect jobs, with ongoing staff training programs focusing on production, quality, and automation.

Calls for help 

Meanwhile, Peter Engoru, a citrus grower and chairperson of the Kalaki Fruit Growers Co-operative, along with the deputy speaker of Kalaki, Esther Apolot Ogwang, urged the government to support their efforts in combating pests and diseases affecting fruit trees.

They also called on the factory to assist in collecting oranges from villages, as transporting the fruits to the factory is costly for local farmers who receive only shillings 300 per kilogramme.

In 2014, President Yoweri Museveni launched an initiative for the construction of a fruit processing factory, marking the start of its commercial production on 13 April 2019.

The factory operates with a shareholding structure where the government holds 80 percent through the Uganda Development Cooperation (UDC), while farmers, represented by the Teso Tropical Fruit Growers Cooperative Union (TEFCU), own the remaining 20 percent.

In June 2024, Chimaki Agro Ltd took charge of the factory's operations on behalf of the Government. With an impressive capacity to process six metric tonnes of fruit every hour, the facility transforms purchased fruits into puree, concentrate and ready-to-drink juice, marketed under the name “Teju Juice” (TEJU).

The Teso region stands out as Uganda's principal producer of citrus fruits, and this factory was specifically established to offer a reliable market for oranges and mangoes, while tackling the challenges posed by post-harvest losses.

Located in Arapai Industrial Park within the East Division of Soroti City, the factory sits approximately 299 kilometres northeast of Kampala.