Sugar producers hit by private mills
Oct 04, 2005
THE three sugar manufacturers facing stiff competition from private mills that is adversely affecting their production capacities.
By Joel Ogwang
THE three sugar manufacturers facing stiff competition from private mills that is adversely affecting their production capacities.
Sugar Corporation of Uganda’s (SCOUL) chief executive, S.C. Khanna, said despite investing about sh700m in loans, outgrowers were selling much of their sugar cane to private mills.
“The mills buy sugarcane at slightly high prices.
“We have been buying 0.6m metric tonnes of sugar cane from outgrowers daily but we now are getting only 0.2m metric tonnes,†he said.
Khanna said as a result, SCOUL would not be able to increase its sugar output from about 46,000 tonnes last year to an estimated 55,000 tonnes this year.
At Kakira Sugar Works, 6,000 employees will either suffer reduced salaries or lose jobs because of increased sell of outgrowers’ sugar cane to local mills.
The human resources manager, Moses Thenge, said operational costs were increasing yet output was dropping.
Kakira, SCOUL and Kinyara Sugar Works, altogether produce about 200,000 tonnes of sugar, enough for Uganda’s annual consumption.
Coupled with the dwindling supply, Khanna said the rampant smuggling of sugar through the coast was affecting local sugar manufacturers.
“This sugar is killing the market because it is sold cheaply and consumers think it is of high quality,†he said.
The sugar manufacturers recently agreed to stabilise factory prices to reduce retail prices.
Khanna said SCOUL would maintain its sh66,000 price per 50kg bag of sugar and sh1,320 for a kilogramme pack.
This might lead to an increase in retail prices, analysts said.
THE three sugar manufacturers facing stiff competition from private mills that is adversely affecting their production capacities.
Sugar Corporation of Uganda’s (SCOUL) chief executive, S.C. Khanna, said despite investing about sh700m in loans, outgrowers were selling much of their sugar cane to private mills.
“The mills buy sugarcane at slightly high prices.
“We have been buying 0.6m metric tonnes of sugar cane from outgrowers daily but we now are getting only 0.2m metric tonnes,†he said.
Khanna said as a result, SCOUL would not be able to increase its sugar output from about 46,000 tonnes last year to an estimated 55,000 tonnes this year.
At Kakira Sugar Works, 6,000 employees will either suffer reduced salaries or lose jobs because of increased sell of outgrowers’ sugar cane to local mills.
The human resources manager, Moses Thenge, said operational costs were increasing yet output was dropping.
Kakira, SCOUL and Kinyara Sugar Works, altogether produce about 200,000 tonnes of sugar, enough for Uganda’s annual consumption.
Coupled with the dwindling supply, Khanna said the rampant smuggling of sugar through the coast was affecting local sugar manufacturers.
“This sugar is killing the market because it is sold cheaply and consumers think it is of high quality,†he said.
The sugar manufacturers recently agreed to stabilise factory prices to reduce retail prices.
Khanna said SCOUL would maintain its sh66,000 price per 50kg bag of sugar and sh1,320 for a kilogramme pack.
This might lead to an increase in retail prices, analysts said.