Over 600 to lose jobs as govt closes sugar factory

Construction works on CN sugar factory in Namayingo District. PHOTO | TAUSI NAKATO.

What you need to know:

  • The government says CN Sugar Ltd has not followed the procedures of establishing the factory.

More than 600 people are on the verge of losing their jobs after the government ordered the closure of a sugar factory in Namayingo District.

The Ministry of Trade, Industry, and Cooperatives has directed CN Sugar Ltd to close, accusing it of failure to establish a nucleus estate of at least 500 hectares before setting up its factory.

Trade Minister Francis Mwebesa, in a June 17 letter to the factory, indicated that the factory only established 121 hectares before setting up the mill.

“Reference is made to your application to establish a sugar mill in Namayingo dated September 30, 2022, and a no-objection letter was issued to you on November 9, 2022, with a condition that you establish a nucleus estate of about 500 hectares,” the letter reads in part.

It adds: “But during the verification exercise, it was discovered that only 121 hectares were established.”

Therefore, Mr Mwebesa said the company’s certificate to set up the factory has been revoked.

“I advise you to identify an alternative land in the area outside Busoga Sub-region where you can acquire substantial land to establish a nuclear estate and submit to the minister and any conveniences caused are highly regretted,” the letter further reads.

However, when contacted, the manager of CN Sugar Ltd, Mr Rashid Kakungulu, said they have established enough acres of sugarcane in line with the government directive. “We have bought 1,300 acres because they told us to buy land yet they only need 1,250 acres, at the site we have 300 acres of sugarcane, and in the field, we have planted sugarcane at about 650 acres,’’ he said.

Mr Kakungulu urged the government to consider the investment they have so far made in the factory.

“We have not yet erected the machines but the construction of the factory is at 40 percent complete with $6m so far invested; unless the government compensates the investors with $15m, we vow not to leave the area,’’ he said.

He added: “The minister gave us a licence, authorising us to construct the stores, staff quarters, perimeter walls, and canteen. The outgrowers have spent a lot of money planting sugarcane but the licence has been revoked by the same minister.”

The Namayingo District chairperson, Mr Ronald Sanya, said they will petition President Museveni to intervene in the issue because CN Sugar Ltd is the only industry that has been constructed in Namayingo since its inception.

The Namayingo District vice chairperson, Mr Abdallah Twaha Kawuta, said they expected to get some revenue from the factory in form of taxes to improve service delivery in the area.

Mr Mark Simunyu, a resident of Kifuyo Village, Buyinja Sub-county, asked the Trade Ministry to compensate them because some have sold graveyards to allow the establishment of a factory.

The General Secretary of Busoga Sugarcane Outgrowers Association, Mr David Christopher Mombwe, said instead of the government working on the fluctuating price of sugar cane, they are closing the few factories in Busoga, which have created jobs in the area.