Pass sugar Bill to save families, Parliament told

Work force. Kakira Sugar Limited managing director Mayur Madhivani (left) introduces some of the workers to President Museveni (2nd left) during the commissioning of Ethanol plant recently. PHOTO BY DENIS EDEMA

What you need to know:

  • Move. Government will relocate some sugar factories to reduce competition for raw materials.

JINJA. Busoga/Bukedi Civil Society Network Coalition (BBUCNEC) wants Parliament to expedite the passing of the Sugar Bill into an act as a way of saving 4,000 Kakira Sugar Factory employees that may become jobless.
Last week, Kakira Sugar Factory, owned by Madhvani Group, announced plans to lay off 4,000 out of its 7,500 employees after failing to breakeven in their operations.
The factory located outside Jinja Town is currently operating at 50 per cent following inadequate raw materials which are due to competition for sugarcane by nearby sugar mills.
Presenting a document to the media signed by 16 district forums/networks in Busoga and Bukedi sub-regions, the chairperson BBUCNEC, Ms Margaret Kyemba Kulaba, said delayed implementation of the sugar policy which gives millers chance to operate close to each other and fighting for the same raw materials is likely to cause collapse of the sugar industry.
Ms Kulaba said laying off 4,000 workers will worsen the unemployment problem in the region.
She said: “We wouldn’t want to see people laid off because it is a big implication. Four thousand families being affected means unemployment will increase, domestic violence, poverty and school dropout.”
She added: “We are also looking at the taxes these companies are contributing. Kakira Sugar has been giving us Sh240b in taxes, which has now reduced to Shs100b. Mayuge is giving us ShsSh2b. These are things we have to weigh because we depend on taxes to support our services like health, education and roads.”
Ms Kulaba also noted that the sugar industry constitutes a primary source of livelihood to many farmers in the region but currently faces challenges that may cause its collapse.
State minister for Karamoja Affairs, also the Bugabula North County MP Moses Kizige recently said government will relocate GM Sugar Uganda Ltd and Mayuge Sugar Industries Ltd to other areas in a bid to minimise competition for sugarcane which has caused famine, poverty and environment degradation in Busoga sub-region.
He said this will be done after the passing of the Sugar Bill and that mills in the radius of 25km will be given money for relocation as well as tax holidays of five years until they stabilise.
Mr Kizige said with the new policy, anyone intending to start up a new sugar factory must have his/her own sugarcane plantation that can provide him 75 per cent of the raw material.

Sugar policy
The managing director Madhvani Group of Companies, the proprietors of Kakira Sugar Works, Mr Mayur Madhvani, said government is deliberately licensing these sugar factories to operate in the same area which contravenes the National Sugar Policy that prohibits opening of new sugar mills within less than 25km of existing ones.
He said Kakira, used to produce 180,000 tonnes annually but is currently operating below capacity between 140,000 and 150,000 tonnes due to the many factories in the sub region.

Suppliers happy with demand
The chairperson Busoga Sugarcane Farmers Association, Mr Isa Budhugo, said although Kakira is agitating for the relocation of its competitors, the association does not support it because they currently have value for their sugarcane due to high demand unlike previously when they had only one factory in the area.
“We used to sell a tonne of sugarcane at Shs4,000 but currently we sell it at Shs17,000. We would sell after almost 35 months because of the low demand unlike today when we sell them at 18 months. We got this relief after the coming in of these factories,” he said.