Sugar industry set for major shakeup

Production in Uganda's sugar industry is set to go up drastically next year when a number of new entrants kick off large scale production having been doing ground work for a number of years now.

Last year, data from Uganda Sugar Manufacturers Association shows that the country produced 365,000 tons of sugar which according to revised estimates increased 17% this year to reach 428,000 metric tons by the end of December.

This will rise further by an estimated 100,000 metric tons by the end of next year when two new sugar millers Atiak Sugar and Bukiwe sugar works all kick off production as planned.

Enter new entrants   

Buikwe Sugar Works Limited located in Buikwe town council is set to begin production next year as one of the new entrants in the industry which analysts say still has lots of opportunities for new players to get, huge investment costs being the only hindrance.

According to the company's Chief Finance Officer Kizza Nelson, they had been doing background operations including mobilisng outgrowers who now total 200 for over two years now and are ready for production to kick off next year.

"We shall be crushing 1,000 tons of cane per day at the start that will reach 4000 tons of cane (tcds) in the medium term this means at the start we are going to be producing about 20,000 tons of sugar annually but this will rise to about 65000 tons per and then 80,000 tons at peak production as all the other factors fall in place" he says.

Kizza adds that Buikwe Sugar Works has so far put together 10 square miles for cane growing in the greater Buikwe area at a cost of 10 million dollars (about 37 billion Uganda shillings) and this is set to increase as they go along.

To bring the entire project to capacity, Kizza says the company will invest up to 200 million dollars (about 740 billion shillings) and will among other products produce 40,000 litres of alcohol a day and 18 megawatts of power part of which will be used by the factory and the rest sold to the national grid.

Atiak Sugar, another plant located in the northern Uganda will also add another 66,000 tons of sugar a year when they start production next year bringing total additional production to about 100,000 tons by the end of 2019.

With 87 million dollars about 322 billion shillings already invested in this Amuru district based sugar factory plus the 740 billion flowing into Buikwe sugar works, the industry will have received over one trillion shillings more in investments by the end of next year enabling Uganda to strengthen herself as a net exporter of sugar in the East Africa region.

These investments are favoured by the statistics that show Kenya which produced an estimated 529000 tons of sugar last year and consumed 867000 tons and Tanzania which produced an estimated 317000 tons of sugar against consumption of 667000 tons will be strategic markets for the extra sugar produced in Uganda as the industry grows.