the economic valuation of the proposed ... - Nature Uganda

Table 7: Projected sugarcane production
Sugar factories
16
Projected Sugarcane production
2003 2004 2005
(tonnes) % (tones) % (tonnes) %
Kakira Sugar Works 980,854 49 1,067,417 46 1,235,955 47
Kinyara Sugar Works 560,406 28 666,217 29 683,813 26
Sugar Corporation of Uganda Ltd 456,141 23 600,000 26 700,000 27
Total Projection 1,997,401 100 2,333,687 100 2,619,768 100
Adapted from: (USCTA, 2003)
The average sugar recovery ratios are also low. Kinyara
has the highest standing at 9.6 percent compared to
Kakira’s 8.9 percent and SCOUL’s 8.4 percent. Following
a crop improvement campaign, Kinyara improved its
cane to sugar ratio to 10 percent in the financial year
2004/05. The same campaign helped Kinyara to surpass
its production target of 64,000 tonnes of sugar per year
by 958 tonnes and to upgrade to a new production
target of 93,000 tonnes per year for 2008. Although the
outgrower contribution also increased to eight hundred
farmers (800), sugar producers remained wary of cheap
imported sugar, which makes competition a nightmare.
They also complained of a poor road network and argued
that it made the expansion of the outgrower scheme
very difficult. Similar issues were raised at both Kakira
Sugar Works and at the Sugar Corporation of Uganda
Limited. Both factories however, suffered production
short falls. The shortfalls were further exercebated by
the low cane to sugar conversion ratios.
3.4. PERFORMANCE OF UGANDA’S
SUGAR SECTOR
Kakira Sugar Works Limited is the largest sugar factory
in Uganda in terms of yield and output. The company
accounts for forty two (42) percent of overall national
output and operates a nucleus estate of 12 000 hectares.
The estate benefited from a contentious takeover of
1,200 hectares that were previously part of Butamira
Central Forest Reserve 2 . The company also services up
to 10,000 hectares of out-grower contract production.
A systematic expansion of the SCOUL nucleus plantation
increased cultivable land by thirty three (33) percent
from 9,000 to 12,000 hectares. In October 2006, RAI
Holdings, a Kenyan consortium, paid Ush62 billion
($33.5 million) for a fifty one (51) percent stake in Kinyara
Sugar Works Limited 3 (KSWL) (New Vision Newspaper,
2006). Kinyara Sugar Works factory produces more
than 50,000 tonnes of sugar per year from over 500,000
mts of sugarcane. The company collaborates with over
800 outgrower farmers operating over 4,600 hectares
of cane plantation. Among the three sugar factories,
Kakira Sugar Works has the largest nucleus estate and
cane output. SCOUL has the lowest output (Table 5).
The overall sugar production output from the three
factories was 198,000 metric tones. This fell short of total
annual demand currently put at 240,000 metric tones by
over 40,000 metric tonnes (East African, 2007).
2 The land use in Butamira CFR changed to permanent
agriculture. The move triggered a law suit by a civil society group. While
the group won the case, it would appear this was a pyrrhic victory.
3 10 % of the shares in Kinyara Sugar Works were offer to the
out-growers of Kinyara Sugar Works, another 10 % to the Bunyoro Kitara
Kingdom and 30 percnet of the shares are to be traded to the public on the
Kampala Stock Exchange
The Economic Valuation of the Proposed Degazettement of Mabira CFR | 2011