We no longer make money from sugar - Madhvani

The Madhvani Group of Companies has said it no longer makes money from sugar but ethanol and electricity being generated from the residues.

The revelation by Madhvani Group follows a recent announcement by the chairperson of Uganda Sugar Manufacturers Association, Mr Jim Kabeho, of how sugar factories are stuck with 800,000 kilogrammes due to reduction in export volume to neighbouring countries.
He said this had resulted in a negative effect on sugar prices and its raw materials.

The group’s director for corporate affairs, Mr K P Eswar, last week said they are selling power at 75 per cent and making more money than in the sugar business.
Kakira Sugar Works in Kakira Town Council, about 19 kilometre from Jinja Town, started producing electricity from bagasse in 2005.

With the power station being adjacent to the sugar factory, it made acquisition of the waste easy.

Bagasse is burnt to produce heat that is subsequently exposed to water, prompting boiling. At boiling point, high pressure steam rises so as to turn turbines and generate electricity.

Upon installing a new boiler machine in 2012, electricity supplied to the national grid rose from 6MW to 30MW, and to 52MW by 2016, according to the factory figures.

In a related development, Mr Eswar said they have been misunderstood on the contentious Sugar Bill.

“There is a misunderstanding and misconception about what is being requested for in the Act. We are not forcing anybody to supply sugarcane only to Kakira Sugar Works, Sugar Corporation of Lugazi Ltd or Mayuge Sugar Industries Ltd,” he said.

Adding: “The farmers are free, even today or even after the law is passed, if at all it is passed, to supply sugarcane to a factory with which they have an agreement.”

The Sugar Bill, passed by Parliament in 2018, seeks to regulate the sugar industry and create a zoning policy where millers are not expected to be within in a 25-kilometre radius, among other provisions. President Museveni has since declined to assent to the Bill.

Mr Eswar added that the Group is buying land elsewhere to reduce the 65 per cent dependency on outgrowers.

“Ideally, the situation in any sugar industry in the world should be 50-50, so we want to reduce dependency and in doing so, we have bought 15,000 acres of land in Kayunga District,” he said.
President Museveni, while meeting journalists at Jinja State Lodge on July 11 during his poverty alleviation tour of Busoga Sub-region, encouraged sugar millers to grow their own sugarcane.

“I have always told Madhvani (Kakira Sugar managing director) to grow his own sugarcane and leave these outgrowers,” Mr Museveni said.

Mr Eswar then described as ‘political’ the June/July strike by sugarcane outgrowers and their alleged defiance of a government directive by trade and industry minister, Ms Amelia Kyambadde, to export sugarcane to western Kenya sugar company, Olepito.

The farmers, on June 29, allegedly signed an agreement to supply a Kenyan firm daily with 600 tonnes of Sugarcane at Shs150, 000 per tonne.