Sugar industry of Uganda

Uganda is the largest producer of granular brown sugar in the East African Community, accounting for about 500,000 metric tonnes annually as of May 2017. ^[1] By 2021, national annual sugar output had increased to about 600,000 metric tonnes of brown sugar and 60,000 metric tonnes of industrial sugar. ^[2] In October 2022, it was projected that the country would produce 822,000 metric tonnes in calendar year 2022. Of that, about 720,000 metric tonnes would be brown table sugar and about 102,000 metric tonnes would be white industrial sugar. ^[3]

History

In 1920, the Vithaldas Haridas & Company (VHC) was under the management of Muljibhai Madhvani, a 26-year-old Indian-born Ugandan businessman, entrepreneur, industrialist and philanthropist. VHC purchased 800 acres (324 ha) of land in Kakira, between Jinja and Iganga, for the purpose of starting a sugar factory. ^[4] Madhvani later became the managing director of VHC. In 1930, that sugar complex opened, later renamed the Kakira Sugar Works. ^[4]

In 1924, under the stewardship of Nanji Kalidas Mehta, another industrialist of Indian descent, Sugar Corporation of Uganda Limited (SCOUL) was founded as Uganda Sugar Factory at Lugazi. This marked the beginning of the Mehta Group, with headquarters in India and businesses in Sub-Saharan Africa and on the Indian sub-continent. ^[5]

21st Century

Until September 2011 Kinyara Sugar Works Limited (KSWL), Uganda's second-largest sugar factory, was majority owned by the Central Government of Uganda. Since then, the majority shares in the business have been owned by the Rai Group, domiciled in Mauritius. As of September 2011 ^[update] , the shareholding in KSWL is as illustrated in the table below: ^{[6] [7]}

Kinyara Sugar Works Stock Ownership

Rank	Name of Owner	Percentage Ownership
1	Rai Group of Mauritius*	70.00
2	Omukama of Bunyoro	10.00
3	KSWL Employees	10.00
4	KSWL Outgrowers	10.00
	Total	100.00

• Note: In Uganda the Rai Group of Mauritius has transformed into the Sarrai Group of Uganda.

Following a drought that adversely affected the water levels of Lake Victoria, which ended around 2011 or 2012, two misconceptions arose in Kenya's political and industrial circles: (a) Uganda was incapable of growing enough raw cane for domestic consumption and (b) any claim by Uganda that it had a sugar surplus was based on the fact that Brazilian sugar barons were dumping sugar on the Ugandan (and Kenyan) markets. ^{[8] [9] [10]}

Starting in 2013, a more reasoned approach by both governments, allowed the development of a verifiable, inter-government database showing Uganda's production, consumption and export data. ^[11]

Expansion

In 2016, construction began on a new sugar factory in Gem Village, Pachilo Parish, Atiak sub-county, Kilak County, in Amuru District, in the Northern Region of Uganda. Known as Atiak Sugar Factory, it has capacity to crush 1,650 tonnes (1,650,000 kg) of raw cane daily, producing 66,000 tonnes (66,000,000 kg) of powder sugar annually. ^[12]

In 2017, the stakeholders for the Madhvani Group reached consensus to lease 10,000 acres (40 km²) of land in the villages of Kololo, Lakang, Bana, Omee, Lujoro, Lwak Obito and Pailyech in Amuru Sub-county, Amuru District in order to establish Amuru Sugar Works. ^[13]

In March 2020, a delegation of Tanzanian government officials visited Uganda, to ascertain the country's ability to manufacture sugar and its ability to generate surplus for export. After touring Uganda's four largest sugar factories, the delegation, led by the Tanzanian Minister of Agriculture, Japhet Hasunga, agreed to place an initial order of 30,000 metric tonnes, ^[14] the first order in nearly two years. ^[15] As of May 2020, Uganda's annual sugar output, by the 11 largest manufacturers, was estimated at 510,000 metric tonnes. With Uganda's annual sugar consumption of 360,000 metric tonnes, approximately 150,000 metric tonnes were available for export. ^{[16] [17]}

In 2022, most of Uganda's surplus sugar was marketed to South Sudan, the Democratic Republic of the Congo and a new market in western Ethiopia. ^[3] That year, the Ugandan Ministry of Trade, Industry and Cooperatives estimated annual national sugar production at "greater than 600,000 metric tonnes". ^[18]

National Annual Output, Marketable Surplus & Strategic Reserve in Uganda (in metric tonnes)

Calendar Year	National Production	National Consumption	National Export	To Strategic Reserve
2014	400,499.05	342,325.14	84,603.30	26,429.29
2015	396,315.95	329,896.00	49,810.55	16,604.40
2016	475,000.00 [19]	350,000.00 [19]	23,899.50 [11]	107,704.90
2017	365,452.00 [20]	360,000.00 [20]		5,452.00 [20]
2018	450,000.00 [21]	360,000.00 [20]		90,000.00 [20]
2019	500,000.00 [21]	350,000.00 [20]	90,000.00 [21]	60,000.00 [21]
2020	510,000.00 [14]	360,000.00 [14]	130,000.00 [14]	20,000.00 [14]
2021	600,000.00 [2]	380,000.00 [2]		220,000.00 [2]
2022	822,000.00 [3]	380,000 [3]	442,000.00 [3]

White industrial sugar

In 2022, Kinyara Sugar started manufacturing "industrial sugar" for use in breweries, soft beverage production and in bakeries and confectioneries. The initial production capacity was 60,000 metric tonnes annually. In 2023 that capacity was increased to 75,000 metric tonnes annually. That brought the national production of white industrial sugar to over 120,000 metric tonnes annually. Other manufactures of industrial sugar in the country include GM Sugar Uganda Limited and Mayuge Sugar Industries Limited. ^[22]

See also

• List of sugar manufacturers in Uganda

References

1. Philomena Matsiko, Maryanne Gicobi, Emmanuel Onyango and Johnson Kanamugire (2 May 2017). "Why price of refined sugar has surged across East Africa". The EastAfrican . Nairobi. Retrieved 10 May 2017.
2. Ministry of Trade, Industry and Cooperatives (8 February 2022). "President Yoweri Kaguta Museveni and Minister Trade, Industry and Cooperatives, Hon. Francis Mwebesa commissions Kinyara Industrial White Sugar Refinery Plant". Ugandan Ministry of Trade and Industry. Kampala, Uganda. Retrieved 14 July 2022.
3. New Vision (20 October 2022). "Museveni tips sugar companies on stabilising the industry". New Vision . Kampala, Uganda. Retrieved 21 October 2022.
4. Madhvani Group (31 December 2009). "About Us: Our History: Kakira Sugar Works". Kakira. Retrieved 12 May 2017.
5. Mehta Group (31 December 2010). "The History of The Mehta Group". Lugazi. Retrieved 12 May 2017.
6. Sheila Naturinda (29 September 2011). "Government sells stake in Kinyara Sugar Works". Daily Monitor . Kampala, Uganda. Retrieved 12 May 2017.
7. Elias Biryabarema (29 September 2011). "Uganda govt sells a 19 pct stake in sugar producer". Thomson Reuters . Retrieved 12 May 2017.
8. K'oyoo Nick (15 August 2015). "East Africa: The Bitter-Sweet Kenya-Uganda Sugar Deal - Public or Private" (via AllAfrica.com). Tanzania Daily News . Dar es Salaam, Tanzania. Retrieved 10 October 2022.
9. The EastAfrican (11 December 2014). "Ugandan sugar barons finally find way to export sweetener to Kenya". The EastAfrican . Nairobi, Kenya. Retrieved 10 October 2022.
10. Wachira Kang'aru and Mwaiki Wahome (15 August 2015). "How sugar barons arm-twisted state to accept imports". Daily Nation . Retrieved 10 October 2022.
11. Ismail Musa Ladu (16 June 2016). "Uganda defeats Kenya over sugar surplus row". Daily Monitor . Kampala, Uganda. Retrieved 10 May 2017.
12. The EastAfrican (10 October 2015). "New sugar factory a blessing to farmers in Northern Uganda" (PDF). Ipsos.co.ke Quoting The EastAfrican . Nairobi, Kenya. Retrieved 19 August 2017.
13. Ocungi, Julius (28 June 2017). "Acholi leaders criticise Amuru sugar factory land agreement". Daily Monitor . Kampala. Retrieved 19 August 2017.
14. Paul Murungi (5 March 2020). "Tanzania Agrees To Open Up Its Market For Ugandan Sugar". Daily Monitor . Kampala. Retrieved 6 March 2020.
15. Rose Mirembe (20 February 2019). "A month later, Tanzania bans sugar importation again". The EastAfrican . Nairobi. Retrieved 6 March 2020.
16. Joanita Mbabazi (1 May 2020). "Museveni Signs Sugar Law, Industrialists Disappointed". Daily Monitor . Kampala. Retrieved 2 May 2020.
17. Daily Monitor (29 April 2020). "Uganda to export excess sugar to Tanzania, Museveni assents to Sugar Act". Daily Monitor . Kampala. Retrieved 2 May 2020.
18. John Odyek (11 September 2022). "Uganda's Sugar Production Hits 600,000 Tonnes Annually". New Vision . Kampala, Uganda. Retrieved 29 August 2023.
19. Biryabarema, Elias (8 March 2017). "Uganda's raw sugar output expected to rise 10 pct this year". Thomson Reuters. Archived from the original on 27 February 2018. Retrieved 11 May 2017.
20. Ojambo, Fred (17 April 2018). "Uganda's 2018 Sugar Output May Rise 17% on Top 3 Producers". Bloomberg L.P. Retrieved 23 May 2018.
21. Dorothy Nakaweesi (13 November 2019). "Sugar Stockpiles To Grow As Exports Are Locked Out". Daily Monitor . Kampala. Retrieved 13 November 2019.
22. Daily Monitor (13 June 2023). "Uganda sets 25pc tariff on refined sugar imports". The EastAfrican . Nairobi, Kenya. Retrieved 29 August 2023.