Kinyara seeks market protection on refined sugar production

In a bid to bolster the growth and sustainability, Kinyara Sugar Works Limited, the leading refined sugar producer in East Africa, has called for increased protection from imported sugar in the Ugandan market. 

The company, established in 1972 and privatised in 1986 due to production interruptions, has shown immense potential in producing industrial refined sugar following a $15m capital investment, which was commissioned by President Museveni in February 2022.

Kinyara Sugar Works Limited has since become the first East African company to produce refined sugar, playing a pivotal role in value addition and import substitution in Uganda. The factory currently produces 250 metric tonnes of white sugar, milled from light brown and brown sugar.

Kinyara Sugar Works Limited has 5,500 metric tonnes in stock at their Masindi factory and 100 metric tonnes in Kampala. 

“We are thrilled with the government’s decision to impose an import duty of 25 percent on industrial refined sugar, which will enable industries like Kinyara Sugar to flourish,” says Aldon Walukamba, the Corporate Communications Manager, said. 

“This duty will provide us with access to the local market, which has been challenging to penetrate in the past year. With the necessary protection, we can efficiently serve the local market.”

Uganda’s finished products enjoy a minimum import protection of 25 percent, with some getting up to 35 percent or even 60 percent protection.

The protection from imports is part of the country’s strategy for industrialisation, ensuring that locally-produced goods receive a minimum of 25 percent protection. 

This move aims to level the playing field, as imported sugar has been sold at a lower price, resulting in unfair competition and accusations of irregular price hikes by local refined sugar producers.

Refined sugar plays a multifaceted role in Uganda, impacting various sectors of the economy, supporting domestic consumption, and contributing to regional trade. It is used in making beverages, pharmaceuticals and confectionaries.

Refined sugar importers are accused of causing unfair competition as local companies such as Kinyara, GM Sugar and Mayuge Sugar are still growing. This results in higher product prices. 

Quality assurance
Simon Okiring, the Production Manager at Kinyara Sugar, sheds light on the meticulous process of producing refined sugar from light brown and white sugar at the Kinyara plant.

The company employs several automated processes, including clarification and filtration, to remove impurities and ensure the sugar meets international quality standards. 

The production system is closely monitored to maintain strict quality control, with minimal human interaction to preserve the product’s purity.

“We closely monitor the production process to maintain top-quality, with less than 0.5 percent human interaction. Industrial sugar meets international standards, verified by institutions like the Uganda National Bureau of Standards, the Mill Research Institute in South Africa, and UK laboratories,” Okiring says.

Despite the challenges, the local market demand for refined sugar is on the rise, and Kinyara Sugar Works Limited stands as the primary producer capable of fulfilling about 70 percent of the domestic market’s needs. 

The company exported 6,000 metric tonnes of sugar last year to markets including South Sudan, DR Congo and Burundi.

Walukamba emphasises that with an installed capacity of 7,500 metric tonnes, Kinyara Sugar, alongside other Ugandan factories producing white sugar, could easily meet the entire local market demand of approximately 10,000 metric tonnes. 

Thus, he strongly advocates for reduced reliance on imported refined sugar, in line with Uganda’s industrialisation objectives.

key fact
Kinyara Sugar Works Limited built the first Industrial White Sugar refinery in East Africa, located in Bujenje, Masindi District in 2022. It produces 60,000 metric tonnes of sugar annually, using 70,000 metric tonnes of brown sugar as raw materials.