The largest sugar producer in Tanzania, Kilombero Sugar has announced plans in investing 550bn/- to double its production and out growers’ capacity in next two years.
The firm, owned by Illovo Sugar Africa and the government, said the factory expansion has started, while mapping of sugarcane out growers’ farms is almost completed. Illovo Africa Head of Sales, Ephraim Mafuru, said the factory production capacity set to double from current 125,000 tonnes to 270,000 tonnes in two years.
“We are working to seeing the country becoming a sugar self-sufficient by playing our party, Mr Mafuru, who oversees sales mostly in SADC region,” said at the sideline of the 20th Conference of Financial Institutions (COFI).
Factory expansion
Mr Mafuru said the factory expansion will not up the sugarcane output tonnage, but also doubles the farmers’ income and out growers’ number. Currently 5500 farmers are selling 600,000 tonnes of sugarcane to the company and getting 65bn/- annually as returns. The new investment will double the out growers’ number to 16,000 and the tonnage supplied to 1.7million and will also almost triple their incomes to 175bn/- a year. The expansions will also double the number of employees from 2000 to 4440 after two years.
“The government put in place a conducive ground for sugar production, especially curbing illegal importation of sugar…this allows us to expand,” Mr Mafuru said.
The country currently spends some 70millon US dollar a year to import sugar, despite having suitable land for sugarcane farming. Kilombero, thus want to turn the table and ventured into factory and sugarcane farms expansion, while looking for financial support from banks to lend the farmers to up output.
Mr Mafuru said most farmers do not use any form of fertilisers or high quality seeds, while some are not irrigated at all, their farmers depending on rains.
“At the moment, these farmers have the ability to double their yields if they are educated in best sugarcane farming practices, despite expanding their ‘shambas’,” the head of sales said. Farm data at Kilombero showed that farmers are producing 40 tonnes per acre, but researches showed they could produce up to 80 tonnes per acre if are using suitable seeds and irrigate farms.
Mr Mafuru also welcomed financial institutions to lend sugarcane farmers, saying they will guarantee the process to facilitate loans to out growers.
“To reduce risks and lowering lending rate to farmers we will guarantee farmers by signing a tripartite agreement–farmer, Kilombero and banks,” he said.
Also Kilombero has employed agriculture extension office to educate farmers on the best farming practices to improve yields per acre and other benefits like training and development provided by the business. The factory produces brown sugar and portable alcohol and creates renewable electricity which powered its factories.
After the expansion the company will generate between 10 and 15 megawatts it expects to sell to TANESCO. Kilombero annually produces around 125,000 tonnes of sugar from approximately 1.25 million tonnes of sugar cane, 55 per cent cultivated by their own cane growing operations and 45 per cent by growers.
