Why Soroti Fruit Factory failed the farmers’ test

The plan by the government to privatise Soroti Fruit Factory has created mixed feelings from various stakeholders.

While some welcome the move, others fear that the old ghosts of privatisation policy, adopted by the government about 31 years ago, are back to haunt the citizens.

The move to privatise the factory comes as it struggles to buy most fruit from farmers as promised.

Teso Sub-region switched to orange and mango growing from 1995 with support from the National Agricultural Research Organisation (NARO) after the collapse of the cow economy as result of persistent raids.

In 2014, the President directed the construction of a fruit factory and subsequently in 2019, he switched on the facility to start production of juice.

However, since 2019, the farmers are yet to benefit from the fruit factory because of its low fruit absorption capacity.

Statistics indicate that last year, Soroti Fruit Factory bought only 500,000kgs of oranges and 200,000kgs of mangoes despite the estimated presence of 8 million trees in the sub-region.

On September 20, State Minister for Teso Affairs Kenneth Obote Ongalo said the government is sourcing for a private entity to take over operations of the $14m factory which continues to operate on losses despite continued investment of about Shs5b each year.

Mr Ongalo said a clear picture on the sale of the factory will be communicated when negotiations are completed.

If sold, the fruit factory will become the second government parastatal in Teso to be given away to a private entity after Soroti meat packers was privatised  in 2002 to the former Internal Affairs minister, Col William Omaria, at Shs300m.

Soroti meat packers’ factory is now a warehouse.

Mr Simon Opeded, a member of Teso Tropical Fruit Growers Cooperative Union (TETFGCU), told this newspaper that the troubles of the factory started the day it was commissioned.

“We were foolishly danced outside the premises of the factory on the day of the launch, not knowing that the machinery installed was of a lesser capacity that can’t even crush oranges from one farm in a day,” Mr Opeded, a resident of Kapujan Sub-county, Katakwi District, said.

“We didn’t come up with the 8 million trees figure as farmers, this figure was arrived at by Uganda Development Corporation (UDC) and it is on that basis that the factory was granted to Teso by the President,” he added.

Mr Opeded said in structuring the operations of the plant, the government left out farmers and handed 80 percent shares to UDC against 20 percent shares for TETFGCU.

“They recruited people in top management without knowledge of oranges,” he said.

Nevertheless, he said the decision to privatise the factory is welcome if it serves the farmers’ needs, adding that this year, farmers will again miss out, because the factory has not placed supply orders yet and fruits are already mature.

According to Mr Vans Omome, the prime minister of Iteso Cultural Union (ICU), the decision to privatize may bring some kind of respite to farmers.

He said from the inception of the factory farmers have not seen its benefits and continue to be cheated by middlemen exporting oranges.

“I am not an enthusiast of privatisation but if it is enforced purposely for this factory to serve our benefit, so let it be,” Mr Omome added.

One of the factory staff, who spoke on condition of anonymity, said their long dream of the government helping the factory have the monopoly of selling concentrates to other beverage companies in the country has not been granted. The staff reasoned that this would have made the factory economically self-sustaining.

“The ugly state we find ourselves in is that the economy is flooded with cheap concentrates from foreign countries, which are used by our competitors to produce coloured beverages that are sold cheaply,” the staff said. 

Mr Jorem Opian Obicho, the chairperson of TETFGCU, said that high level discussions are ongoing between UDC and ministries of Finance, and Trade about the privatisation plan.

“I will not be able to pre-empt what the sale will mean to our shares as farmers,” he said.

Mr Julius Ekoom, the executive director of Soroti fruit factory, said the entity is financially incapacitated, coupled with a business environment that is flooded with beverages made from cheap concentrates by their competitors.

As a way forward, he said, “there is a need for working capital  for extensive research and lobbying to establish all possible high demand markets in Uganda, East Africa, Africa, and globally.”

Mr Bosco Okiror, the chairperson of Teso Parliamentary Group (TPG), said they hope to present the factory privatisation plan before the floor of Parliament.

When contacted, Mr Onapito Ekomoloit, the board chairperson of Soroti fruit factory, said UDC, whose interests he represents and being the majority shareholder, is best placed to speak on the sale of the facility.

However, the executive director of UDC, Mr Patrick Birungi declined a phone interview, preferring a formal interview despite his earlier commitment to our request.