Commodities

Competition expected as new sugar company joins market

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The new sugar factory- Kaliro Sugar factory- is expected to stimulate the sugar sector by boosting local sugar production.

The new sugar factory- Kaliro Sugar factory- is expected to stimulate the sugar sector by boosting local sugar production. PHOTO BY STEPHEN OTAGE. 

By Stephen Otage

Posted  Wednesday, April 24   2013 at  01:00

In Summary

The company has a production capacity of 60,000 tonnes of sugar annually.

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Sugar Allied Industries Limited, a new sugar manufacturing company, on Monday turned on its boilers to warm up the factory to start sugar manufacturing in June this year.

Other sugar manufacturers
The company, a subsidiary of the Alam Group of Companies, expects to begin production with 6,000 tonnes of sugar annually, becoming the fourth largest sugar producing company in Uganda after Kakira Sugar Works, Kinyara Sugar Works and the Sugar Corporation of Uganda Limited which collectively produce an estimated 320,000 metric tonnes of the commodity.

Land
According to Mr Purna Chandra Das, the Alam Group finance manager, the sugar company located in Kaliro District, Eastern Uganda, has acquired 5,000 acres of land for their sugar cane and another 18,000 from outgrowers. He said the $50m factory whose construction started in January last year, is being funded by a $30 million loan from the East African Development Bank while the rest is private equity.

With the firing of the boilers on Monday, it is expected that in 45 days’ time, the boilers will have generated enough steam to run the company’s turbines to generate 12MW of electricity; 5MW for domestic consumption while 7MW will be sold to Uganda Electricity Transmission Company. “We hope to lower the cost of sugar as well as increase competition among the producers,” he told journalists. The sugar company becomes the third in Busoga region after Kakira Sugar works Limited and Mayuge Sugar Factory.

Production
Information provided by Uganda Sugarcane Technologists Association (USCTA) indicated that the country produced 289,665 tonnes of raw sugar in 2012 compared to the 327,075 tonnes forecasted in the same year. The opening in June is expected to be presided over by President Museveni, and 2,000 jobs are expected to be created.

sotage@ug.nationmedia.com