Delayed zoning policy hurts Ugandan sugar producers

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The delayed policy has encouraged the diversion of cane from producers who have contractual obligations with out-growers.

The delayed implementation of the sugar production zoning policy is hurting existing sugar millers, according to Mr Mayur Madhvani of Kakira Sugar Limited.

Speaking to Daily Monitor recently, Mr Madhvani said the failure to implement the policy is creating confusion, with new millers diverting supply by out-growers who have contractual obligations with specific factories.

“We spend a lot to develop out-growers. About 730 tonnes of sugar canes are diverted every day. This represents 15 per cent of our demand,” he said.

“We are doing everything to sensitise them (out-growers) but the government has failed to implement the sugar zoning policy. We are disappointed.”

However, when contacted for comment, Trade minister Amelia Kyambadde said Mr Madhvani would do better to contact her instead of operating through the media.

“I don’t operate through the media. Let him come and we talk,” the minister said.

However, Mr Madhvani said he had talked to all those concerned, who the President had directed to implement the policy, without much success.

According to the policy, a sugar mill or factory is not supposed to be licensed and set up within 30 kilometres of an existing factory.

The rationale is to ensure that harmful competition for sugar cane supply does not arise or even factories do not operate below capacity.

However, Mr Madvani said he is already a victim to the failed implementation of the policy.

Mayuge Sugar Industries licensed last year is just 14 kilometers away from his factory and reportedly diverts an estimated 400 tonnes of cane daily.

GM Sugar and Luzinga Sugar factory are within 18 kilometers and 20 kilometers respectively, diverting an estimated 100 tonnes and 30 tonnes daily.

“We are not against other people establishing sugar factories but the operations of the above sugar mills are not regulated and this has disrupted productions projections,” Mr Madhvani added.

He explained that the loss to the company was beyond sugar production but was also affecting its power production.

“The company produces 22MW of power of which we supply 12.14MW to the national grid,” Mr Madhvani said.

By Emmanuel Mulondo & Denis Edema, Daily Monitor

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