The 14th USCTA Annual Report 2011

THE UGANDA SUGAR CANE

TECHNOLOGISTS ASSOCIATION

FOURTEENTH ANNUAL REPORT

FOR CALENDAR YEAR

2011

APRIL 2012

FOREWORD

The Uganda Sugar Cane Technologists Association congratulates all Ugandans to this years golden jubilee celebrations. The Association continues to expand its production and diversification. The year 2011 was full of challenges for the Uganda Sugar Industry and East Africa at large. The year started with a build up of sugar stocks at all the 3 main factories followed by a severe shortage of sugar countrywide from June to November and again huge stock balances in December as we closed the year. Draught in the last quarter of 2010 and early 2011 affected the supply of sugarcane from both nucleus estates and out growers for all three factories. Kinyara Sugar Ltd was most hit by the long dry spells resulting into numerous cane fires; similarly Kakira and SCOUL had shortage of cane due to prolonged drought, while shortage of power due to mainline replacement affected production at SCOUL. Poaching of cane by sugar companies without nucleus estates, the depreciation of the Uganda Shilling all combined increased sugar shortage. Outside Uganda, there was increased demand in both East Africa and surrounding countries. The clashes in S.Sudan of May/June 2011, the floods in Rwanda and the drought in Tanzania and Kenya all combined decrease the stocks of sugar in the region. The situation was even made worse by traders and stockists who started hoarding the available sugar in the market leading to drastic increase in prices of sugar. The Governments response was to allow tax free sugar importation for a specific period. The exercise was however not properly monitored and more sugar including raw sugar was imported into the country in excess of the 45,000 MT initially approved. This has caused a long-term crisis in the sugar industry with sugar companies failing to sell their stocks in the next 4 months of 2011 as well as in early 2012. The sugar industry however, continued to expand both on the production lines and on diversification. We hope the weather patterns will improve this year to support the expansion. We also call upon the Government to implement the sugar policy that was passed two years ago. The policy which regulates the sugar industry including zoning provides for a 25km radius or 50km distance from one factory to another. This is important Worldwide to allow mills to expand their production. What we have seen however, is that Govt has continued to licence mills within the zones of already existing factories, making them uncompetitive, leading to a total distortion of the sugar industry. The sugar industry is in a position to contribute significantly to the Ugandan economy by producing electricity for grid supply using modern high-pressure bagasse cogeneration. This requires a significant investment in new equipment. Sugar industry cogeneration projects can be quickly implemented in a period of 2 years as compared to 5-7 years for hydro projects. Moreover, bagasse cogeneration diversifies the electricity supply mix by using bio-mass as fuel and reduces Ugandas dependence on hydro-power. The sugar industry has hence urged the Government to increase the Renewable Energy Feed-In Tariff for bagasse cogeneration in order to provide a reasonable return on the extra capital investment. The details of what transpired in the sugar industry in 2011 are contained in this report and I would like to wish you good reading. Mwine Jim Kabeho Chairman 19th April 2012

USCTA Annual Report 2011 1

UGANDA SUGAR CANE TECHNOLOGISTS ASSOCIATION

FOURTEENTH ANNUAL REPORT

2011

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 2

2. ABOUT THE UGANDA SUGAR CANE TECHNOLOGISTS ASSOCIATION .............. 3

3. THE SUGAR INDUSTRY ..................................................................................................... 3

4. USCTA COUNCIL ............................................................................................................... 20

5. FACTORY SUB-COMMITTEE REPORT......................................................................... 20

6. AGRICULTURAL SUB-COMMITTEE..24 7. SAFETY, HEALTH AND ENVIRONMENTAL SUB-COMMITTEE............................ 30

8. TECHNICAL CONFERENCE........................................................................................... 32

9. PROGRAMME FOR 2012 .................................................................................................... 33

APPENDICES:

1. Ugandan Sugar Production 2. Retail Sugar Prices in Different Regions of Uganda 3. Ex-Factory Sugar Prices 4. Sugar Production and Assumed Consumption Statistics 5. Ugandan Sugar Production Forecast 2012 6. Monthly Pattern Production & Imports 7. Comparative Factory Statistics (Annual) 8. Comparative Factory Statistics (Monthly) 9-13 Sugar Import Data by Country 14 Annual Sugar Import Data. 15 Comparative Meteorological Data 16-18. Comparative Agricultural Data


1. INTRODUCTION 1.1 This is the Fourteenth Annual Report produced by the Uganda Sugar Cane

Technologists Association (USCTA). 1.2 It is intended to bring together a report on the proceedings of USCTA, statistics

regarding the production and performance of the agricultural and processing sectors of the sugar industry, and useful information about the industry in Uganda and elsewhere.

1.3 USCTA established a permanent secretariat in Kampala to handle the ever increasing

volume of administration now that Uganda in a member of the International Sugar Organisation (ISO).

1.4 Copies of the report can be obtained from the USCTA Secretariat. Enquiries should

be addressed to:

Mr. Wilberforce Mubiru The Secretariat Manager Uganda Sugar Cane Technologists Association Plot 133/135, 6th Street Industrial Area P.O. Box 33479 KAMPALA. Land Line: 256-414 347498 Cell: 256-772 422627 Fax: 256-414 347766 E-mail: [email protected]. Website: www.ugandasugar.org


2. ABOUT THE UGANDA SUGAR CANE TECHNOLOGISTS

ASSOCIATION 2.1 Preliminary meetings in 1994 led to the adoption of a Constitution by an inaugural

General Meeting held on 20th July 1995. The constitution was subsequently registered with the Ministry of Justice and set down the objectives of the Association. The constitution was amended in 2004 and further amendments were made in 2008. The objectives are: -

the interchange of scientific knowledge of, and discussion and investigation of

technical problems related to the production of sugar; the improvement in accuracy and rational standardization of methods of factory

chemical control; to encourage and assist in the improvement of the technical knowledge of persons

engaged in the Ugandan Sugar Industry; to promote research into all aspects of sugar cane agriculture, sugar milling

practice, by-product development, and any such other fields as the Association may consider fit;

to increase efficiency and reduce costs of production of sugar and related products;

to enhance the quality of Ugandan sugar products; to minimize, and where possible eliminate the risk of harmful effects of sugar

production on the environment, and to promote environmentally sound husbandry;

to accept donations or grants for special and general objects, this acceptance being without prejudice to the rights and Constitution of the Association;

to improve the safety of all people working in the industry and to minimize occupational health hazards.

2.2 The USCTA has an enthusiastic membership of 168, comprising technical staff and

managers from the three Ugandan commercial producers, independent farmers and government officials.

3. THE SUGAR INDUSTRY 3.1 Sugar production in the country dropped by 27,605 tonnes (9%) in 2011, the lowest in

3 years. The performance of the previous year was a growth of 3% which was lower than 20% increase each year in 2008 and 2009. The main reason for the contraction was the general harsh weather experienced at the end of 2010 and early months of the 2011. Additionally, there were accidental cane fires at Kinyara that destroyed over 3,000 hectares and caused a loss of approximately 30,000 tonnes of sugar.

3.2 At Kakira Sugar Limited and SCOUL, some of the registered outgrower farmers


diverted cane either to jaggery mills or to Mayuge factory and there were cases of harvesting immature cane that had ripple effects on recovery. Kakira Sugar Limited also experienced frequent electrical problems. All the big three sugar factories produced much lower than the production levels forecast in 2010. Each mill Kakira, Kinyara and SCOUL fell short by 32,511 tonnes, 37,655 tonnes and 15,994 tonnes respectively, though Kinyara produced slightly less sugar than in the year before. Overall performance for the year was deficient although all three sugar manufacturing units continue on their expansion plans in order to meet the growing market demand.

UGANDA SUGAR PRODUCTION 2002 2011

MILL 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Est

Kakira

75,268

87,296

84,160

88,292

93,182

96,786

124,210

157,914

151,110

132,679 157,000

Kinyara

57,900

53,799

65,137

61,299

60,201

58,062

67,053

76,139

90,477

88,725 120,000

SCOUL

32,795

35,579

46,819

44,137

38,178

37,520

42,062

48,334

50,430

38,006 45,000

Others*

-

-

-

-

-

5,000

5,000

5,000

5,000 7,500 7,500

* Estimated GM Sugar and Mayuge Sugar

TOTAL

165,963

176,674

196,116

193,728

191,561

197,368

238,325

287,387

297,016

266,910 329,500

3.3 The production forecast for the coming year, 2012, has been adjusted against 2011

performance to more modest levels. Kinyara estimate a 31,275 tonne increase over the 2011 performance in their sugar manufacturing as a result of their expansion activities concluded at the end of November 2010. Kakira expects to produce 157,000 tonnes of sugar and SCOUL a smaller increase over 2011 production to 45,000 tonnes.

3.4 The year ended with exceptionally dry whether with exceptionally low relative

humiditys in January 2012. Slow improvement of sucrose accumulation during January (in combination with low minimum temperatures) but less as compared to normal years. The dry climate has facilitated wild cane fires. During period 1st January to 17th February, Kakira Sugar Limited registered fires burning about 305 hectares and some of the outgrower crop whose area that is yet to be established.


3.5 At the end of 2010, USCTA members received the National Sugar Policy with a lot of

excitement following months of dialogue between all stakeholders. Last year, amid severe sugar cane shortage, there was a rather passive attitude of Government on jaggery mills and small factories that enticed farmers to divert cane. These two events put the National Sugar Policy to test with mixed results. The former was a positive indication that the National Sugar Policy can be strictly adhered to but the latter indicated very disappointing results. USCTA will continue to encourage Government to implement the policy in whole.

3.6 One aspect of the National Sugar Policy is to help regulate where new sugar mills can

be established. The industry had requested sugar zones with a radius of 35 km in order to control the growing number of applications for the establishment of sugar mills in close proximity to existing sugar mills. The policy however has granted a smaller zone radius of 25 km, this in effect means that two sugar mills should not be closer than 50 km to each other. The purpose of the zoning policy is to safeguard food security, protect the environment and provide opportunity for existing millers to expand their operations for economies of scale in order to supply the nation with affordable sugar.

3.7 Two mills, GM Sugar and Mayuge Sugar, had only recently been established, prior to

the publication of the National Sugar Policy at distances much closer than the new official zone radius. These two mills have not established their own nucleus estates that correspond to their crushing capacity and are purchasing sugar cane from farmers contracted to supply to either Kakira or SCOUL.


Uganda - Sugar Production, Consumption and Population (Actual and Forecast)(Sources URA, UBOS and USCTA)

0

100

200

300

400

500

600

700

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Year

'000

Ton

nes

Suga

r

0

10

20

30

40

50

60

70

80

Popu

latio

n m

illio

n

Sugar ProductionSugar ConsumptionPopulation

3.8 Uganda will need to produce more sugar in the future as the economy and population

expand. The GDP (purchase power parity) of Uganda is growing and per capita sugar consumption is projected to grow from the current 8.6 in 2011 to 14.0 in 2020. The population is growing at 3.56% per annum and it is projected that Uganda will have about 39 million by 2020. These factors will raise the sugar consumption to around 553,370 tonnes while production will have grown by about 40% to 523,500 tonnes.

3.9 There is now a total of 15 licensed sugar companies in Uganda. The newly licensed

companies are Mukwano in Masindi that has registered approximately 2,500 TCD; Tirupati Development in Nakasongora; Uganda Crop Industries in Buikwe with some little production there already; Kafu Sugar Limited in Masindi; Kamuli Sugar Limited in Kamuli; Sugar and Allied Industries in Kaliro; Kenlon in Namasagali; and Bugiri Sugar Company in Bugiri. New sugar projects need to be implemented in conformance with the zoning guidelines of National Sugar Policy.

3.10 The new projects should be planned carefully as it takes a few years for a green field site to start producing significant quantities of sugar. Additionally, it is important to make sure that the location is suitable before beginning implementation. There are two potential sites that are being considered by investors for development, i.e. Sango Bay and Amuru. On 3 February 2012, the High Court judge in Gulu delivered a judgment on the disputed land of Amuru in favour of Amuru Sugar Works Limited and ruled that the allotment of 10,000 hectares of land by Amuru District Land Board is quite in order. Further, the judge suggested that Amuru Sugar Works Limited can pursue for the remaining 10,000 hectares which was already applied for.

3.11 The factory gate price of sugar in local currency experienced a rise during the latter

half of 2011 due to inflationary forces, while in US$ terms the cost of sugar fell below the Uganda shilling level for the first time in 10 years. The temporary abnormal prices of sugar in Uganda during the period June to September in 2011 were


artificially created by speculative wholesalers until imported sugar arrived. The import parity price of international sugar and the volatility of the US$ have all contributed to the price of domestic sugar.

Sugar Price in Uganda Shillings per 50 Kg bag and US$ per kg

30,000

50,000

70,000

90,000

110,000

130,000

150,000Ja

n-01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Uga

ndan

Shi

lling

s pe

r 50

kg b

ag (N

et)

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

US

$ pe

r kg

(net

)

Sugar Price USH/50kg bag (net)Sugar Price US$/kg (net)

3.12 The annual headline inflation rate is dropping. The year ending January 2012 recorded

25.7% from 27% for December 2011 and 28.3% for the year ended September 2011. According to UBOS, the main contribution is in the food crops that registered a substantial fall to 13.7 year ended January 2012 from 20.4 recorded for December 2011.

3.13 In January 2012, the Bank of Uganda announced a reduction in the Central Bank Rate

(CBR) of one percentage point to 22% for the month of February from 23% in January. Pleased with the effectiveness of his monetary policy, the governor announced his confidence that inflation will be reduced to single digit levels by the end of 2012. The shilling has slightly gained strength against the dollar and stabilised at about 2,300 to one US dollar.

3.14 The EAC community member countries are facing similar inflationary challenges as

Kenyas has remained at 18.3%, Tanzanias at 19.7% and Rwandas at 7.81 in the year ended January 2011. Implementation of the EAC common market protocol has continued with commitment at the Summit level but slow at technical level.


US $ Exchange Rate with UGX (Official BOU Rate)

0

500

1,000

1,500

2,000

2,500

3,000UGX per US$

3.15 Performance of the three manufacturing plants varies somewhat and this largely depends on the quality of the raw material being processed. Sugar cane quality depends on a large number of factors, for example soil type, sugar cane variety, rainfall, temperature, humidity, sunshine hours, cane husbandry and mill performance. The weather and several other parameters are not under direct management control. The apparent best conditions in Uganda for sugar cane quality are in Kinyara, where 2011 records show sugar recovery on cane of 9.96%. Kakira and Lugazi report recovery of 9.0% and 7.9% respectively. These results are all similar to previous years.

3.16 Kakira Sugar Limited experienced electrical failures on the F&S mill drive, fibrizor

motor, cane kicker motor and a 3MW turbine. The breakdowns had a negative effect on the overall grinding efficiency. Several corrective actions have been taken such as commissioning of spare mill frequency drive, training of technicians, additional trip protections of the steam turbine in order to reduce the electrical breakdowns to an acceptable level.

3.17 The combination of sugar cane yield and factory sugar recovery on cane is indicated in

the table below, resulting in field sugar recovery at Kakira of 0.52 TS/ha/m compared to 0.50 and 0.36 TS/ha/m for Kinyara and Lugazi respectively. Kakira and Kinyara Sugar had previously recorded field sugar productivity of just under 0.50 TS per ha per month. Sugar cane productivity here in Uganda, in comparison to the best sugar cane growing regions of the world, is fairly low. Swaziland for example has a field productivity of double the Uganda experience, and is indicative of why prices paid for sugar cane varies from one country to another.


NUCLEUS ESTATE 2011 FIELD PRODUCTIVITY

Unit Kakira Kinyara SCOUL

Sugar Cane productivity TC/ha/m 5.8 5.0 4.6

Recovery TS/100TC 9.0 10.0 7.9

Field sugar productivity 2010 TS/ha/m 0.52 0.50 0.36

3.18 The volume of sugar cane produced by the outgrower farmers and purchased by the millers has quadrupled in the last 10 years. The turnover has increased by 8 times in the same period from UGX 9.6 billion to over UGX 100 billion ($44 million at current exchange rate). Kakira has registered an increase in the number of outgrower farmers to 8,600 during 2011/12012 season.

Sugar Cane Purchses from Outgrower Farmers

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Tonn

es o

f Can

e P

urch

ased

from

Out

grow

ers

0

20

40

60

80

100

120

Farm

er R

even

ue U

GX

Bill

ion

Cane purchased from SCOUL OutgrowersCane purchased from Kinyara OutgrowersCane purchased from Kakira Outgrower FarmersFarmer Revenue UGX billion

3.19 Normally, there are no restrictions on the volume of sugar being imported into

Uganda because Uganda generally observes a policy of free market forces when it comes to international trade, except there is a Common External Tariff (CET) of 100% for all but COMESA sugar entering the region. Due to the severe shortage of cane during 2011, Government sought to import 45000MT of sugar free of tax to meet the deficit. This was however not closely monitored and more sugar plus raw sugar has been imported in the country resulting into a market circulated sugar creating a problem to locally produced sugar.

3.20 Since the introduction of the East African Community there has been a desire to

harmonise requirements governing standards and quality of products and services. The East African Standards for sugar have subsequently been reviewed and issued for adoption by partner states. The upper limit for the East African standard of sugar colour is as follows; Refined sugar 60, Plantation (Mill) White Sugar 400, Light Brown Sugar 700, and Brown Sugar 1300 ICUMSA1. These colour standards have

1 ICUMSA (International Commission for Uniform Methods of Sugar Analysis)


been approved as East African Standards and are supposed to be adopted by all the East African countries by the end of 2012.

3.21 Uganda was re-admitted to the International Sugar Organisation (ISO)2 in March 2006. ISO is a United Nations subsidiary organisation and operates at Government level. USCTA is required to collate all sugar and ethanol production, consumption, import and export data annually on behalf of Government and to forward this to the ISO in London.

3.22 Membership of ISO immediately permitted the USCTA to enter into negotiations with

the Common Fund for Commodities (CFC), an intergovernmental financial institution established within the framework of the United Nations, to join in the East African Sugar Cane Development Project. This project is aimed at improving sugar cane productivity and juice quality by importing sugar cane varieties better suited to the climate in East Africa. The beneficiaries of this project will be the cane farmers and the millers if the project is successful.

3.23 In May 2007, the Sugar Board of Tanzania (SBT) and the Uganda Sugar Cane

Technologists Association signed a Project Implementation Agreement to implement the 5 year Sugar Cane Improvement Project. The aims of the project are to improve the productivity of sugar cane production in the East African Community (EAC) through a five year variety importation programme. The programme is to be supported by a clean seed cane initiative, aimed at growing and distributing treated seed cane to the smallholder sugar cane growers or Outgrowers. The estimated project cost is US$ 4.2 million of which CFC will provide a grant of US$ 2.3 million and the balance of US$ 1.8 million will be provided by counterpart funds in kind by the 3 beneficiary countries of Kenya, Uganda and Tanzania. Of the US$ 2.3 million, US$ 1.0 million is being provided by the OPEC fund to CFC. The project is proceeding but very slow progress is being made.

3.24 Since 1998 the introduction of new sugar cane varieties at all three sugar estates, had

been organised following an earlier agreement with CIRAD, Montpellier, France. This agreement came to an end in 2008. During this agreement a total of 475 varieties of sugarcane had been imported. Kakira now has only 25% of the estate cane area planted to the new cane varieties, down from 27% last year. Kinyara and SCOUL are establishing the new varieties more cautiously. The introduction of the new varieties to the Outgrowers has been much slower too, as they are still not seeing any benefit in terms of cane yield. A new method of paying farmers for quality of cane

2 The International Sugar Organization is the unique intergovernmental body devoted to improving conditions on the world's sugar market through Debate, Analysis, Special Studies, Transparent Statistics, Seminars, Conferences and Workshops. The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 1014, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding Members were later joined by nine other Members: Qatar (1961); Indonesia (1962); Socialist Peoples Libyan Arab Jamahiriya (1962); United Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador (1973) suspended its membership from December 1992-October 2007; Angola (2007) and Gabon (19751994). OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965. CIRAD, the Centre de cooperation Internationale en Recherche Agronomique pour le Dveloppement, is a research organization specializing in agriculture in the tropics.


rather than quantity may have to be introduced before the farmers will be convinced to adopt new varieties. A similar scheme is being introduced as a trial in Kenya.

3.25 The Ugandan Sugar Industry is continuing to invest in expansion and diversification.

Over US$ 100 million has recently been invested by the three sugar mills to increase sugar production and to export power to the national grid. The feed-in tariff paid to the two sugar manufacturers is extremely low and the industry is lobbying for an improved tariff rate.

3.26 SCOUL is planning to expand and increase the milling capacity from the present 115

TCH to 160 TCH by end of 2012. The expanded capacity will enable them to produce 90,000 tonnes of sugar annually. This will involve replacement of some of the existing mills as well as the addition of all equipments in plantation, cane transport and sugar factory required to match the expansion crushing rate. A total expansion of this nature will require investments in the range of US$ 27 Million.

Sugar Corporation of Uganda

Ethanol Plant at SCOUL

3.27 The plans at Kakira Sugar include expansion and further diversification. Crushing

capacity will be increased to 7500 TCD or 350 TCH, to increase annual milling to 2


million tonnes of cane and sugar production to 180,000 tonnes. Power generation will be increased to 50 MW with most of the additional power being for transmission to the national grid. In effect, Kakira will be supplying a total of 32 MW of power to UMEME. The implementation and development of the power project will be achieved by installing a new 160TPH, 67 bar boiler and a 30 MW condensing turbo-alternator. Future plans include the erection of a 40 to 60 kilolitre distillery to produce power alcohol. The cost will be in excess of US$ 100 million. The plan is to have factory and co-generation activity ready by October 2012, while the date for distillery commissioning is not yet known.

Kakira Sugar Ltd

Co-generation Plant at Kakira Sugar Ltd

3.28 Kinyara successfully completed a sugar plant expansion programme from 2,200 to

4,000 TCD. This expansion programme included addition of mill and boiling house machinery and equipment and modification or modernization of existing equipment. With this expansion, the annual milling capacity is 1.2 million tonnes of cane and the sugar production capacity is 120,000 tonnes. Furthermore the co-generation capacity has been expanded by an addition of 5 MW of power of which most, 4.5 MW are being sold to UMEME through the national power grid network. Future plans are being developed to further improve thermal efficiency from the available bagasse with the installation of modern high pressure steam turbo-alternators to


produce up to 40 MW of electricity. The cost estimate for this new co-generation plant at Kinyara is US$ 70 million.

Kinyara Sugar Ltd

3.29 The leaders of the sugar industry and USCTA continue to advise Government on how

molasses could be converted into a bio-fuel, or anhydrous ethanol, and utilised as an environmentally friendly fuel additive. The benefits are considerable; a potential 10% saving on the foreign exchange cost of importing petrol; creation of additional employment; a reduction of informal Waragi production and a reduction in the emission of greenhouse gases from petrol driven vehicles. However, before the industry invests in expensive distillation equipment, a national policy on renewable energy must be put into action by enlisting the commitment of the fuel companies. This is where Government support is essential.

3.30 Mentioned above, the erection of distillery plants is to produce anhydrous ethanol to

mix with petrol. This is an environmentally friendly fuel that will be produced from molasses, one of the by-products of the sugar industry. Government is required to guarantee a market and fix an attractive price.

3.31 Sales of petrol in Uganda have hovered around 220,000 million litres per annum for

the past 10 years and with molasses production increasing as sugar production increases it is feasible to produce ethanol to mix with petrol. In 2011 slightly over 102,000 tonnes of molasses was produced by the three mills. Assuming that one tonne of molasses can be turned into 200 to 250 litres of anhydrous ethanol, then 20 to 25 million litres of anhydrous ethanol could be mixed with 180 to 225 million litres of petrol at a 1 to 9 ratio to produce more than 200,000 million litres of E10 petrol, thus saving the foreign exchange cost of importing several million litres of petrol. An economic and environmentally friendly exercise.

East African Sugar 3.32 The East African Community agreed to implement a regional integration of the three

partner states, Kenya, Tanzania and Uganda, on 30 November 1999. Then the three Heads of State signed a Treaty to establish an East African Customs Union, as a transitional stage to full integration. This was fulfilled on 2 March 2004 when a protocol establishing an East African Customs Union was signed. This


protocol came into force on 1 January 2005. 3.33 The EAC membership was expanded to include Rwanda and Burundi during the 8th

Summit meeting of the EAC Heads of State on 30 November 2006. Admission of Burundi and Rwanda became effective on 1 July 2007, when their individual Accession Treaties were concluded. The Republic of Southern Sudan has submitted its application to join the EAC.

East African Heads of State

3.34 In 2009 the next phase of regional integration was finalised when the protocol to establish a Common Market of the East African Community was approved by the 5 partner Heads of State on 20 November 2009. This protocol provides for the following; free movement of goods, labour and people, the right of establishment, the right of residence, free movement of services, free movement of capital and other related aspects that are ancillary to the proper functioning of a common market. The effective date of the protocol was 1st July 2010.

3.35 The analysis of the Common Market progress shows a mixed picture with both

positive developments and challenges, arising from the implementation of the Customs Union. The positive developments far outweigh the challenges. There are improvements in trade and revenue performance; there is predictability in the policy environment; there is confidence in the region; etc and a lot of potential is yet to be exploited. Based on the provisions of the Protocol and the objectives set out, indeed the Customs Union has been successful. The most important features in the Protocol were the Common External Tariff and the Customs Management Act, which have been implemented. There are still challenges that include Non-Tariff Barriers, problems with compliance among Partner States, structural problems, etc. These should be seen in the context of an ideal situation. They should be worked on.


3.36 There has been a nation-wide consultation exercise on import duty conducted by EAC joint revenue authorities, especially on sensitive products. USCTA upholds the positions that existing rates apply. That is sugar for direct consumption (1701.11.90) attracts a duty of 100% or US$ 200 per metric tonne of CIF price at EA port of entry, whichever is the higher. Industrial sugar is taxed at 10% of CIF value at EA port of entry. This set has helped to the Uganda Sugar Industry to expand since 2005. We do recommend that it stays even under the proposed Free Trade Area of EAC/SADC/COMESA

3.37 In future when world sugar price fall, which they will soon, when production outstrips

consumption again, COMESA sugar will become freely available for the Kenyan market. This will be the time when it is doubtful whether the whole of the East African sugar industry will be able to survive full liberalisation of the market if the international sugar prices fall to unrealistic levels again. Some of the smaller inefficient producers may well disappear if that occurs. This inevitably will create political problems when and where mill closures are experienced.

3.38 To complicate matters further as far as sugar trade is concerned; there is a new

development to create a tripartite free trade area between COMESA, EAC, and SADC. The first Tripartite Summit of the Heads of State of the Governments of these three trading blocks was held in Uganda on 22nd October 2008. A decision was taken to expeditiously establish a free trade area (FTA), with the ultimate goal of establishing a customs union. There is no doubt the ultimate objective is an African Economic Community. In 2011, Africa consumed 25% more sugar than it produced and this provides the Uganda sugar industry some comfort.

3.39 The second COMESA-EAC-SADC Tripartite Summit hosted by His Excellency,

Jacob Zuma, President of the Republic of South Africa, on 12 June 2011 agreed integration amongst COMESA, EAC and SADC based on the Tripartite Memorandum of Understanding (MoU) that came into force on 19 January 2011. The major achievement at the Summit was the launch of the Tripartite FTA negotiations which is a key milestone in the integration of Africa.


Rest of Africa and World Sugar 3.40 Sugar production and consumption in Africa seems to be falling slightly compared to

the previous years report. Production has fallen by a million tonnes and consumption would appear to have fallen nearly by the same amount and this is reflected in a drop in consumption of 2 kg per head from 16.7 kg per head per annum to 14.8 kg in 2010,

3.41 According to the data obtained from ISO, projection for 2011/12 sees the Africas

total production practically unchanged from the level forecast in November. The ISO expects the countries in Sub-Sahara Africa to produce 7.405 million tonnes in 2011/12 (October/September), up 297 thousand tonnes or 4.2% from the previous season. The region remains not fully self-sufficient in sugar as domestic production is forecast to cover no more than 80% of projected demand as against 79% estimated for the previous season. The region houses a number of sugar producing nations but no country in the region currently produces more than 700 thousand tonnes a year with South Africa being the only exception.

3.42 The Democratic Republic of Congo (Zaire), Southern Sudan, Burundi and Rwanda are

the target markets for Ugandan sugar, as these countries are in close proximity and have large populations. It is clear though that we must act fast to grow the industry in Uganda as there is plenty of opportunity to meet domestic and regional demand.


Africa Sugar - Production and Consumption (thousand tonnes) 2011/12

3.43 As expected, after two years of deficit in world sugar production compared to

consumption, the coming year is expected to be in surplus by just over a million tonnes. This is a typical cyclical trend in total world production and results in a year


end stock to consumption ratio wavering between 30% and 50%. The current production trend is on an upward slope of the cycle, as the chart below indicates.

World Sugar Production - Consumption

135

140

145

150

155

160

165

170

175

Suga

r m

illio

n to

nnes

Sugar ProductionSugar Consumption

Sugar Production 137,171 148,470 142,248 140,797 150,159 166,079 168,647 162,258 157,160 168,955 173,001Sugar Consumption 136,057 140,919 144,518 146,912 151,315 156,167 161,503 164,772 166,585 167,669 167,827

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

3.44 The World sugar production for 2011/12 is put at a new record of 173 million tonnes which is an increase of 8 million tonnes over the previous year. Higher world production is featured in Brazil, China, India and Thailand. World consumption is forecast at an all time high of 167.8 million tonnes with a healthy annual growth of 2.32% generally in line with the 10-year average of 2.17%. A world statistical surplus of 5.147 million tonnes is projected.

2011 World Sugar Situation

3.45 This year, the world price of raw sugar has been fluctuating due to uncertain

production levels, climatic conditions and other conditions. After the May 2011 slump to USc 21.77 per pound, the price has shot up to USc 28.88 in August has dropped again to USc 24.65 in January 2012. The refined white sugar oscillates at about USD 635 per tonne.


3.46 The 2011/12 world closing stock of sugar is estimated by ISO to be around 58 million

tonnes, a slight increase of 5 million tonnes on the previous year. This level of sugar stock represents 35% of world consumption. This ratio is returning to a more normal position and it is only to be expected that sugar prices may return to around US$ 600 per tonne as the volume of sugar produced is expected to surge in the short term.

3.47 Looking at regional sugar surplus and deficit data it is evident that South America, and

in particular, Brazil, is currently the only major surplus producing region in the world. Brazil is expected to produce 36.1 million tonnes and consume only 13.3 million tonnes of sugar this season. Thus Brazil is creating the main bulk of the surplus regionally and globally. The N & C America region has also returned to a modest surplus position due largely to the surplus production in Guatemala.

World Sugar Surplus / Deficit by Region


4. USCTA COUNCIL 4.1 Council Office Bearers for the year 2011 elected by the Seventeenth USCTA Annual

General Meeting held on 8th April, 2011 at Colline Hotel Mukono, for a period of two years ending April 2013 were: -

Chairman : Mr. Mwine Jim Kabeho (Executive Director, Madhvani Group). Vice-Chairman : Mr. Ramadasan P.

(General Manager, Kinyara Sugar Ltd). Secretary / Treasurer : Mr. Wilberforce Mubiru (USCTA Secretariat Manager). Sub-committee Chairmen: Factory : Mr. Ravi J. (Process Manager, Kinyara Sugar

Ltd). Agriculture : Mr. Maharajan S. (Agricultural Manager, Kinyara Sugar Ltd). Safety, Health & Environment : Mr. Geoffrey Wabomba

(Kakira Sugar Ltd).

Government Representative : Mr. Cyprian Batala (Assistant Commissioner of Trade/ MTIC).

5. FACTORY SUB-COMMITTEE REPORT 5.1 The committee for the year 2011 consisted of the following members. Mr. Ravi J - Kinyara (Chairman) Mr. James Mangeni - Kinyara (Substantive Chairman/Secretary) Mr. Vijay Dongare - SCOUL Mr. Lawrence Oboth - SCOUL Mr. Rashidi. A. Mutanje - Kakira Mr. Geoffrey. A. Amoko - Kakira Mr. Wilberforce Mubiru - USCTA Secretariat (Co-opted) 5.2 Meetings

The sub-committee met on the following days: 1ST meeting - 8th June 2011 : Kinyara Boardroom, Kampala 2nd meeting - 23rd August 2011 : Kinyara Boardroom, Kampala


3rd meeting - 20th January 2012 : Kinyara Boardroom, Kampala 4th meeting - 9th March 2012 : Kinyara Boardroom, Kampala

Issues discussed included: Food Fortification with Vitamin A:

(i) Draft law: - In many developing Countries, Uganda not being an exception, Vitamin A deficiency is a widespread problem that is not necessary limited to specific group of people or isolated communities. Among the interventions available to concerned government agencies, food fortification with Vitamin A is an accepted method of delivering this lacking micronutrient to the population at large. Based on this, the Ugandan government and Ministry of Health, Nutrition department came up with a law, still at draft level, which shall make it compulsory/mandatory to fortificate some food consumables like; Salt, Maize and Wheat flour, Edible oil, Sugar being inclusive, as a way of supplementing the said Vitamin to the population who cannot easily access it through their current dietary.

(ii) Sugar Fortification with Vitamin A: - Fortification of Sugar with

Vitamin A being one of the safest, most efficacious, and most cost-effective interventions to control Vitamin A deficiency and because of sugars well-established production and marketing system, is compelling the Ministry of Health and Uganda government to pass a law mandating the Sugar Industry in the Country to do so and this calls for a direct involvement of the sugar stakeholder before enacting the this law. Two fact-finding tours; one by the USCTA Secretariat in conjunction with the subcommittee and the second by Ministry of Health to equip the concerned with the relevant data were conducted during the year as indicated below.

(iii) Zambia Sugar Fortification Study Tour:- This particular fact-finding

tour was organized, coordinated and sponsored by Ministry of Health and took place in October, 2011 and one person per each USCTA factory was supposed to participate but unfortunately Kinyara was not represented unlike the other factories. Some of the teams findings were; three sugar factories are fortifying on commercial basis, fortification equipments were acquired freely from Guatemala through governments subsidy arrangement, fortified product packaged in light sensitive polythene bags as well as khaki to avoid the nutrient from deteriorating quickly. Report is available

(iv) Mumias Sugar Fortification Tour: - This fact-finding tour was

organized by USCTA Secretariat in conjunction with the factory subcommittee and drew two representatives from each factory. The Secretariat covered the transport logistics while the rest was taken care of by the individual estates and the team was very grateful to all. Like the first


team above, this was also supposed to establish more especially; the characteristics of handling fortified sugar (Mumias being in more less the same climatic and environment conditions like Ugandan factories), whether the Kenyan government subsidized on the equipment acquirement, whether fortification is practiced on commercial scale, and the cost of equipment (if not subsidized) and fortificant. Report is available at the Secretariat on the teams findings.

Use of by-products in a Sugar Industry:

(i) Bio-fuel: - The government of Uganda released a very well researched draft, indicating good intention/perspective geared towards establishing this particular long overdue industry in the Country as a short term solution to reducing fuel shortage before the Oil industry goes commercial as well as creating employment early in the year, 2011 but it appears the proposal was shelved. The Sugar industry is therefore, finding it difficult to commit their resources into ventures where they are most likely not to recoup returns on their investments. SCOUL has proceeded to construct a modern 30,000 Klitres distillery with capacity of producing three different brands of ethanol because of having an established market with spirits industry.

(ii) Cogeneration: - The European Union (EU) in conjunction with the

Mauritian government carried out an energy audit in the Country, covering all the three USCTA factories, so as to establish the prospective potential which the sugar factories could invest in to generate more electricity for sale to the National grid.

(iii) Carbon production: - A low carbon production workshop conducted by

an Austrian firm was attended by some representatives from the Sugar industry. The firms emphasis is basically on agro industry, focusing at raw material like fly-ash - where samples were taken from Kakira factory for analytical purposes to ascertain the availability of the most desired product.

The East African Regional Standards:

(i) Like in the year 2010, not a single meeting was convened by this Regional Standards body in the year 2011 and all issues which remained pending are still unresolved.

(ii) Sugar Branding:- In the year 2009, the East African Regional Standards body resolved to categorize Sugar packaging in three different brands (Plantation white, Light Brown and Brown) Sugar based on polarization and colour, such that the regional population can be fed on a variety of their preference. The implementation of this resolution in Uganda by UNBS has not been possible because of the squabbles between the responsible Ministry and the Standards Agency.


Comparative factory performance report.

The monthly factories comparative reports were exchanged regularly and included in appendices are tables illustrating each factorys year performance.

In summary, the total cane crushed reduced from 3,222,551 tonnes in the year 2010 to 2,840,278 tonnes in the year 2011, registering a decline of 11.86%.

The Sugar processed also followed suit by 11.18% decline in the year 2011 as compared to year 2010, registering only 259,410 tonnes compared to 292,052 tonnes. Sugar bagged percent cane crushed improved slightly from 9.06 in year 2010 to 9.13 in year 2011.

5.3 Open days Factory open days were successfully held on the following dates:

KAKIRA : 2nd August, 2011.

A paper on utilization of formerly juice heaters to preheat Boiler feed water at Kakira was presented and discussed.

SCOUL : 16th December, 2011.

A paper on Tracking of factory automobile Using 3D Tracking System was presented and discussed. The paper highlighted the importance of increasing productivity of a particular unit by locating its whereabouts 24/7 as well as monitoring its fuel consumption.

KINYARA : 3rd February, 2011. A paper on Benefits of the Sugar Crystal Sizer Installation at Kinyara was presented and discussed. The sugar crystal sizer installation was aimed at ensuring a particular brand (crystal size) is maintained as a way of observing quality of what is supplied to the consumer.

Acknowledgement The chairman would like to extend his sincere appreciation to the council for all the support that has enabled the Sub-Committee to perform its functions and to all the Sub-Committee members for their unreserved co-operation and hard work in accomplishing the years programs.


6. AGRICULTURAL SUB-COMMITTEE

6.1 The committee consisted on of the following members for the year 2011

Mr. Maharajan Subbaiah : Kinyara Sugar Limited; Chairman Dr. Dr. M.R. Reddy : Kakira Sugar Limited; Member Mr. P. Chandrasekaran : SCOUL, Lugazi; Member Dr. D.V.N. Raju : Kakira Sugar Limited; Member Mr. Omoding Robert : Kakira Sugar Limited; Member Mr. Anandan Annamalai : Kinyara Sugar Limited; Member Dr. Bollampalli Ramesh : Kinyara Sugar Limited; Secretary Mr. Suresh Reddy : SCOUL, Lugazi; Member Mr. Venkatesh Babu : SCOUL, Lugazi; Member

6.2.1 Sub-committee meetings:

The sub-committee met on two occasions on the following days; 1st meeting : Tuesday, 12th July 2011 at SCOUL Boardroom, Kampala 2nd meeting : Thursday, 15th March 2012 at Kinyara Boardroom, Kampala

Discussions were held on the following issues of common interest:

6.2.2 Review of weather data

Monthly meteorological data of the three sugar estates were exchanged and reviewed from time to time. The data are presented in Appendix II and summarized below.

6.2.3 Kakira estate:

An amount of 1354.6mm of rainfall was received during the year 2011. October and January were wettest and driest months respectively. The rainfall distribution pattern was poor during March may 2011 while it was excessive during August November 2011. Pan evaporation rates were higher from January to July and in December 2011 than rainfall and sugarcane crops experienced moisture stress. Mean max. temp. was highest in February while it was lowest in August 2011. Mean min. temp. was lowest in January while it was highest in May 2011. Relative humidity at 9.00hrs and 15.00hrs were highest in September and lowest in January 2011. Mean sunshine hours were lower during the year (5.1 hours/day) as against the LTM of 5.6 hours/day.

Higher amount of rainfall, higher relative humidities and lower sunshine hours during August December contributed towards poor accumulation of sucrose in cane stalks leading to poor sugar recoveries. Sugarcane crops experienced moisture stress from January to June leading to poor crop growth and will reduce cane productivity in future crop harvests.

6.2.4 Kinyara estate:


The annual rainfall totals at Kinyara was 1637.9mm against 1427.0mm LTM. The year 2011 recorded the highest amount of rainfall for the last 15 years since 1997. August was the wettest month with 259.1mm of rainfall. Other wet months were Oct, Sept and May all receiving rainfall above 200mm. However, in the months of January and February, only 13.3 mm rainfall was received and even in March, rains commenced only after 15th. This clearly shows that there was no uniform distribution of rainfall meaning severe drought & excess rainfall affecting cane growth and production and quality both in Estate and OG. Wind speed was also high facilitating arson/unplanned fires. At Kinyara during the year 2011, 3000ha of cane were lost during the dry months on account of cane fires (1200ha NE & 1800 ha-OG). Mean maximum and minimum temperatures were at 29.1oC and 17.0 o C respectively. Day temperatures were very high during February (33.0oC). Relative Humidity at 9.00hrs and 15.00 hrs were at 80.9% and 53.1% respectively, especially during the month of January at 15.00hrs RH was as low as 30.6%.Sunshine hours were very high during January(8.4hrs) and February(9.0 hrs) which are conducive for sugar accumulation but less favorable for cane growth.

6.2.5 SCOUL Estate:

A total amount of 1571.3mm of rainfall was received on the estate during the year 2011. November was the wettest month while February was the driest. High rainfall was received during the months of August, September, October and November. Estate experienced severe drought during Feb and less rainfall during the period January & May. Inconsistent rainfall and uneven distribution has affected drastically the cane growth and production in both Estate and Out Growers. Added to that during the high rainfall period, cane quality was low due to the prevalence of unfavorable conditions for maturity and ripening. Mean maximum and minimum temperatures were at 30.5 o C and 17.7 o C respectively. Sunshine hours were very low during August (4.9hrs). Relative Humidity at 9.00hrs and 15.00 hrs were at 76.0% and 51.0% respectively.

6.2.6 Cane production and productivity

Cane production and productivity on the three estates and O.G. farmers fields were discussed and the data were presented in Appendix 18, 19 and 20 and summarized below.

6.2.7 Kakira:

The total quantity of cane supplied was 580,025 tons with an average production of 116.2 Tc/ha. An area of 4,991 ha of both plant and ratoon crops on the estate were harvested and supplied during the year.

Average cane yield and productivity from both plant and ratoon crops were 116.2 Tc/ha and 5.9 Tc/ha/m respectively when harvested at an average crop age of 20.2 months.


The Out Growers supplied 840,599.0 tons (59.17%) by harvesting 11,420 ha. The average cane yield and cane productivity were 73.61 Tc/ha and 3.99 Tc/ha/m respectively with an average crop age of 18.4 months (much lower than that recorded in Estate).

6.2.8 Kinyara Sugar Ltd:


Average cane yield and productivity from both plant and ratoon crops were 72.8 Tc/ha and 5.0 Tc/ha/m respectively when harvested at an average crop age of 14.9 months.

The Out Growers supplied 416,152.0 tons (47.73%) by harvesting 6,337 ha. The average cane yield and cane productivity were 65.7 Tc/ha and 3.80 Tc/ha/m respectively with an average crop age of 17.7 months (much lower than that recorded in Estate). Mill was not operating during the months of July, August October and November due to cane age and maintenance.

6.2.9 Sugar Corporation of Uganda Ltd:


Average cane yield and productivity from both plant and ratoon crops were 63.54 Tc/ha and 4.57 Tc/ha/m respectively when harvested at an average crop age of 13.89months.

The Out Growers supplied 76,080 tons by harvesting 1,303.34 ha. The average cane yield and cane productivity were 54.27 Tc/ha and 3.90 Tc/ha/m respectively with an average crop age of 13.93 months.

6.2.10 Varietal composition Varietal composition by end of December 2011 on the three estates were presented in Appendix 18, 19 and 20 and summarized below.

6.2.11 Varietal Composition:

Co945 is the major commercial variety grown on the three nucleus estates (Kakira:

27.1%, Kinyara : 39.4% and SCOUL : 65.74%). Area under Co421 (26.0%) in Kakira and N14 (38.9%) in Kinyara has increased

compared to previous year.


At Kakira in marginal soils, area under N14 & R83-2065 and R83-2089 is being increased while in SCOUL area under CB3822, FR 95-2345 & PR 831248 is being increased because of the performance in trials.

In Out Growers fields Co945,Co421 & R83-2065 at Kakira, Co945 at Kinyara and Co421,Co945 & CB38-22 were the major commercial varieties.

6.2.12 Review of the performance of CIRAD and other imported varieties at Kakira,

Kinyara and SCOUL

The Agronomy staff of the three-sugar estate conducted an up-date study on 1/7/2011 at SCOUL, 2/7/2011 at Kakira and on 4th & 5th/8/2011 at Kinyara. The variety screening report was submitted to the USCTA Council. The following is the summary of the report.

A total of 200 clones from 1st to 6th consignments were evaluated on the three

estates. Among these 200 clones, R83-2065, FR91-679, R83-2089, FR93-803, FR93-761 and CB38-22 were released for commercial cultivation at Kakira. N14, Cb38-22, B61-63, Co1148 and FR95-563 are under commercial cultivation at Kinyara. R83-2065, R83-2089, CB38-22, FR93-2345, PR93-1248 and N14 are under commercial cultivation at SCOUL.

6.2.13 The most promising varieties from 7th to 11th consignments - CIRAD;

Kakira : ISD20, RB83-5089, SP80-185, VMC92-189, FR99-344, ROC15 Kinyara : ISD20, FR98-52, KN93-14, FR96-34, FR98-21, ROC15,

CP88-1834 SCOUL : PR83-1248, FR98-058, FR98-050, FR00-098, VMC95-37 Varieties from 8, 9, 10, 11 and KESREF consignments are undergoing commercial

evaluation in replication trials. 35 varieties from Q and R, 15 varieties from MSIRI, Mauritius & 10 varieties from SASRI, South Africa are at single eye bud stage.

6.2.14 Germination failed varieties from 2011 importations:

Kakira:

R582, R93-4254, N19, N23, N25, N27, N30, N36, N39, N40 & N41 Kinyara:

Q190, R85/1334, R89/1246 ,R582, R573, R93-4254, R92-4246, R94-142, R94-2138, R94-6447, R 95-6480, R581, R584, M1394/86,N19, N23, N25, N27,N30, N36, N40 & N41.


SCOUL: R573, M1394/86, M1565/87 & M25761/95

These varieties will be exchanged among the three sugar companies.

Minor diseases observed include brown spot, ring spot, leaf rust, top rot, yellow

leaf syndrome on some clones in all the three estates. Termite damage was observed at Kinyara.

6.3 CFC/ISO/29 Project

Three EACIN meetings were organized on 24th, 25th June 2011 in Dar-es-Salaam, Tanzania, 15th and 16th September 2011 at KESREF, Mtwapa Kenya and 13th December 2011 at Kakira Sugar Limited Uganda.

The Managing Director of CFC, Ambassador Ali Mchumo , Mr. Lindsay, Senior

Economist of ISO, Mr. M.M. Kombe, the Director General of the SBT and Dr. Reddy the country coordinator of the EACIN project visited all the three sugar estates on Uganda on 17/11/2011 & 18/11/2011 to review the status of CFC/ISO funded activities in the three estates.

Visiting delegates were satisfied with the progress made by all the three estates of

Uganda on project related activities. Dr. Reddy Country Co-coordinator requested the CFC & ISO officials to extend

the project for a minimum period of three years to get maximum benefit with regard to variety importation and selection.

Mid term review of the project was done at Mombasa, Kenya where members

from Kenya, Uganda and Tanzania as well as members from CFC attended.

6.3.1 Project activities

Component 1: Variety importation: Agreements were signed with SASRI S. Africa, eRcane Reunion, Visacane CIRAD France and MSIRI Mauritius for importation of sugarcane clones.

Component 2: Variety screening: 19 clones from SRI, Tanzania, 16 clones from CIRAD France, 15 clones from MSIRI Mauritius and 11 clones from SASRI South Afr1ca were imported and all these clones are at 1st clonal stage of selection of the three estates

Component 3: Clean seed cane initiative: The following are the details of primary


(S1) and secondary (S2) seed cane nursery areas developed on the three estates.

Estate S1 nurseries (ha)

S2 nurseries (ha)

Total (ha)

HWT (tons)

Kakira 41.2 255.5 296.7 242.0 Kinyara 40.6 273.3 313.9 110.8 SCOUL 23.1 87.7 110.8 185.0 Total 104.9 616.5 721.4 537.8

Component 4: Extension and training: 15, 10 and 9 on-farm demonstration trials

were established on the Outgrower famers fields at Kakira, Kinyara and SCOUL respectively.

Training programmes: 5, 10 and 24 training programmes were organized and a total number of 500 Outgrower farmers each of the sugar company were attended the training programmes.

The expenditure under extension and training was US$ 11,250 incurred from the project funds.

6.3.2 Agricultural field days:

Three field days were organized on 14th January 2011 at SCOUL, 29th July 2011 at Kakira and 17th February 2012 at Kinyara.

6.3.3 Kakira:

Power point presentations were made on sugarcane planting material and impact on AMS at KSL. This was followed by estate field visits on variety evaluation, minimum tillage, green and burnt cane harvesting, low land management, green manuring and seed cane nursery blocks.

6.3.4 Kinyara:

Power point presentations were made on following topics; Biological control of White Scales by Dr. Ramesh B., Estate Agronomist; Post harvest yield losses at Kinyara by Mr. Omara Dennis. This was followed by a field visit to a OG farmer fields for demonstrating On spot cane cutting quality assessment, PHYL & white scale affected fields.

6.3.5 SCOUL:

Power point presentations were made on the topics: Low land management, ratoon cane management and performance of new variety adaptation followed by field visits


on the estate consisting of chisel ploughing and trash mulching and land preparation in low lands.

6.3.6 Visits

Dr. Reddy, Mr. Chandrasekaran and Dr. Ramesh attended the EACIN meeting held in Kenya. Dr. M. R. Reddy attended the technical conference of SASTA held in Durban, S. Africa.

6.3.7 Best paper evaluation

The three Estate Agronomists from each estate evaluated the technical paper(4 Nos.) presented in the annual technical conference 2011 and the best paper entitled: Integrated Agronomic practices in monoculture cropping system for sustainable sugarcane production by D.V.N. Raju was adjudged as the best paper for the year 2011.

6.4 Acknowledgements

The Chairman expresses his sincere gratitude to the USCTA council and the members of all the three estates for all the support and co-operation extended to him in the smooth running of the sub-committee activities. Chair thanks the management of the three sugar estates for their continued support and encouragement and for hosting lunch, organizing presentations, field visits etc. during field days and variety evaluation team visits.

7. SAFETY, HEALTH AND ENVIRONMENTAL SUB-COMMITTEE 7.1 Committee members:

Mr. Geoffrey Wabomba Kakira Mr. Ronald Tuliraba Kakira Mr. Peter Ongula Kakira Mr. J. Okello Onen SCOUL Mr. Moses Ezama Kinyara

7.2 Meetings

Two meetings were held as on 23rd September 2011 and 21st October 2011 respectively

7.3 Issues of discussion A number of issue were discussed predominant among which were; Effluent Treatment

NEMA requires industrial wastewater to be treated before discharging


into the environment. It is therefore upon individual sugar estates to plan, set programs and act accordingly to meet national set standards. Kakira signed up a compliance agreement with NEMA on 15th September 2011 to implement audited issues as per agreed time frames. Kakira underwent ISO 14001 EMS and was certified by October 2011. SCOUL - in progress of setting up a plant for treating wastewater from the distillery plant and Kinyara - in the final stages of signing up a compliance agreement with NEMA.

Monthly safety reporting

Accident reports of respective companies should be presented at each meeting for comparison and discussions against improvements. Loss in time (Man hours) is a measure of performance/effectiveness of safety hence it should be included in the accident reports.

7.4 Accident data from January December 2011 Kakira registered a total of 48 disabling accidents of which 1 was road traffic

fatality. SCOUL registered a total of 44 disabling accidents of which 1 was road traffic

fatality. Kinyara registered a total of 41 disabling accidents with no fatality.

7.5 Safety Training of employees

Against road traffic accidents, drivers of Kinyara, SCOUL and Kakira are trained by in-house or road traffic police officers at the premises.

Kakira has progress on having its expatriate staff attend SHE sensitizations through quarterly Forums and ongoing ISO 14001 Environmental Management System program.

Kakira has program of sensitizing its sub-contractors on SHE issues before being engaged to start work on new projects.

Recommendations

There is need for all the sugar estates to respond and continuously improve so as to comply with the NEMA requirements against the environment issues.

Training of vehicle drivers should be an ongoing issue to continuously improve on their skills.

Some employees who do not express themselves openly before their superiors should be encouraged to report safety issues [risks/hazards] by using safety box or suggestion box.

There is need for the engineering sections to do a lot against regular or preventive maintenance of the Sulphur burner equipment/s whose leakages of the sulfur-dioxide gas is not uncommon to avoid choking effects to the workers as chemical masks do not offer full effective action.


7.6 Best SHE paper 2011 Control of some workplace hazards at Kakira Sugar Limited by George Kiwanuka.

8. TECHNICAL CONFERENCE

The Association's Thirteenth Annual Technical Conference took place on the 7th and 8th April 2011 at Colline Hotel, Mukono. A total of twelve technical papers were presented and discussed by the delegates. The conference was attended by 124 participants, 28 members from Kinyara, 58 members from Kakira, 35 members from SCOUL, 2 representatives from V.M. biotech in India and 1 representative from the Ministry of Tourism, Trade and Industry.

List of papers for USCTA 13th Annual Technical Conference 7th and 8th April

2011 at Colline Hotel conference hall, Mukono.

8.1 SHE. Control of some workplace hazards at Kakira Sugar Limited by George Kiwanuka, Kakira Sugar Ltd.

8.2 Factory: Steam Demand When using AC Motor Drive at the Mill as

compared to Turbines at Kinyara Sugar Limited by J.Ravi, Kinyara Sugar Limited

8.3 Factory: Electrification of Fletcher & Smith Mill at Kakira Sugar Limited by

Lwawuga George Williams.

8.4 Factory: Raw Water & Effluent Management at Kakira Sugar Limited by Ms. Barbara Clare Nawakuna

8.5 Factory: Bagacillo System at SCOUL by Vinjay Dogare SCOUL 8.6 Factory: Bagasse Feeder Table at SCOUL by Vinjay Dogare SCOUL 8.7 Agric: Land Surveying of Newly Opened Estate for Sugarcane at Kinyara

Sugar Ltd Using Electronic Total Station (TS) Instrument and LSS Software by Embati Justus Adebo, Kinyara Sugar Limited.

8.8 Agric. Post Harvest Yield Loss Review in Kinyara Sugar Ltd, by: Omara Dennis Wat-Okee and Nazziwa Elizabeth

8.9 Agric: Evaluating the Effect of Different N, P and K Fertilization Rates on the Performance of Secondary Seed (S2) Nurseries at Kakira by M.D. Misango and D.V.N. Raju, Kakira Sugar Limited.

8.10 Agric. Integrated Agronomic Practices In Monoculture Cropping System For Sustainable Sugarcane Production by Dr. D.V.N. Raju and Mr. Michael Davis Misango, Kakira Sugar Limited.


8.11 Agric. Determination of Sugarcane Yield Advantages of Mycorrhiza Inoculants on Ferralsols by Esther Sebuliba, SCOUL

8.12 Agric. Effect of Organic Fertilizers on Growth and Processing Quality of

Commercial Sugarcane by Anywar Michael Odai , SCOUL 9. PROGRAMME FOR 2012 9.1 Council

Maintain a dialogue with Government on all issues relating to the Ugandan Sugar Industry; and the impact of the EAC on sugar trade in the community and determine the implications of the proposed tripartite free trade area joining EAC with COMESA and SADC;

A membership drive among farmers; A membership drive among suppliers; High priority to be given to the Annual Technical Conference; Monitor URA statistics and deter sugar smuggling; Keep contact with UNBS/URA on many issues including standards of sugar and

imports and exports of sugar through the monthly Sugar Sector Working Group meetings;

Discuss with Government the options for molasses by-product development including distillery and animal feed products;

Progress further investigations and implementation of electricity co-generation; Maintain dialogue with the International Sugar Organisation (ISO) and act on

behalf of Government for reporting sugar data to ISO. Join the East African Society of Sugar and Cane Technologists (EASSCT)

9.2 Factory and By-products

Enhance distribution of comparative statistics; Maintain review of molasses and bagasse disposal strategy as a priority; Maintain work on health, safety and environmental issues as a priority;

9.3 Agricultural sub-committee

Seek government agricultural representation on the sub-committee and encouraging the research on sugarcane by the agricultural university and Agricultural Departments.

Rejuvenate the vigor of the commercial varieties grown in Uganda sugar industries for longer period by Tissue culture techniques.

Maintain annual importation of new varieties, from new sources; through CFC/ISO project;

Continue to develop and exchange standardised monthly reporting of meteorological and agricultural data of common interest;

Maintain work on health and safety and environmental issues as a priority;


Cooperate with Sugar Board of Tanzania and Kenya Sugar Board regarding the CFC funded African Sugar Development Project sponsored by the International Sugar Organisation.

9.4 SHE sub-committee

Systematic implementation of NEMA Environmental Audit manual; Work towards introduction of eyewashes at strategic places and tyre cages in the

remaining Estates still lacking; Inspection of all Workers transport tracks in all the Estates by our Committee.

Acknowledgement goes to the following members for their contribution to the report as follows:

Sections 1,2,4,8 and 9 : USCTA Secretariat. Section 3 : Mr. Mwine Jim Kabeho, (Chairman USCTA). Section 5 : Mr. Ravi Jayarama Reddy, Kinyara (Chairman Factory Sub-Committee). Section 6 : Maharajan S. (Chairman Agriculture Sub- Committee). Section 7 : Mr. Geoffrey Wabomba (Chairman SHE Sub- Committee). Group photo of the participants taken during the 13th USCTA Technical Conference at Colline Hotel Mukono - 2011

Uganda Sugar Cane Technologists Association APPENDIX 1

UGANDA SUGAR PRODUCTION 2011 (Excluding GM, Mayuge and UCI)

Kakira Kinyara SCOUL Production All FactoriesMonth Cumulative Month Cumulative Month Cumulative Month Cumulative

Jan-11 17,540 17,540 11,727 11,727 4,974 4,974 34,241 34,241 Feb-11 15,249 32,789 11,141 22,868 4,299 9,273 30,689 64,929 Mar-11 16,149 48,938 13,264 36,132 4,369 13,641 33,782 98,711 Apr-11 13,621 62,559 11,537 47,669 60 13,702 25,219 123,930 May-11 97 62,656 10,848 58,517 2,548 16,250 13,493 137,422 Jun-11 6,288 68,944 10,617 69,134 3,296 19,545 20,201 157,623 Jul-11 15,125 84,069 - 69,134 1,644 21,189 16,769 174,392

Aug-11 10,330 94,399 886 70,019 4,250 25,440 15,466 189,858 Sep-11 8,565 102,964 7,426 77,445 2,425 27,865 18,416 208,274 Oct-11 7,776 110,740 273 77,718 3,340 31,205 11,389 219,663 Nov-11 9,114 119,854 298 78,016 2,971 34,175 12,382 232,045 Dec-11 12,825 132,679 10,710 88,725 3,831 38,006 27,366 259,411

% of Total 51% 34% 15%

FACTORY SUGAR PRODUCTION 2011

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

-

50,000

100,000

150,000

200,000

250,000

300,000

Month Cumulative

FACTORY SUGAR PRODUCTION 2011

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Suga

r Ton

nes

Kakira Kinyara

SCOUL

USCTA Annual Report 2011

Uganda Sugar Cane Technologists Association APPENDIX 2

SUGAR PRICES (GROSS) December 2011 Retail Prices in Major Towns

Kampala and Jinja

Mbale Masaka and Mbarara

Gulu, Arua and Average Factory Gate Prices

Kampala High

0.01.02.03.04.05.06.07.0

Dec2010

Feb Apr Jun Aug Oct Dec2011

Kampala Low

0.01.02.03.04.05.06.07.0

Dec2010


Mbale

0.01.02.03.04.05.06.07.0

Dec2010


Masaka

0.01.02.03.04.05.06.07.0

Dec2010


Mbarara

0.01.02.03.04.05.06.07.08.0

Dec2010


Gulu

0.01.02.03.04.05.06.07.0

Dec2010


Arua

0.01.02.03.04.05.06.07.0

Dec2010


Factory gate Prices incl. Taxes (Avg of 3 mills

0.0

1.0

2.0

3.0

4.0

Dec2010


Jinja

0.01.02.03.04.05.06.07.0

Dec2010



Uganda Sugar Cane Technologists Association

Ex-Factory Sugar Prices 2011

APPENDIX 3

Price Ugandan Shilling per 50 kg bag net (i.e. excluding Excise and 18% VAT)

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Kakira 84,958 84,958 84,958 88,009 88,009 88,009 94,004 101,122 125,868 134,343 142,818 138,580 Kinyara 84,958.2 84,958.3 84,958.2 88,009 88,009.1 88,009 94,004 100,445 124,343 134,343 142,818 138,580 SCOUL 85,158 85,158 85,158 88,209 88,209 88,209 94,204 101,322 126,068 134,543 143,018 138,780

Price US$ per kg Excluding TaxesJan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

URA $ Rate 2,306 2,338 2,336 2,391 2,379 2,389 2,420 2,420 2,655 2,760 2,760 2,604Kakira 0.74 0.73 0.73 0.74 0.74 0.74 0.78 0.84 0.95 0.97 1.03 1.06Kinyara 0.74 0.73 0.73 0.74 0.74 0.74 0.78 0.83 0.94 0.97 1.03 1.06SCOUL 0.74 0.73 0.73 0.74 0.74 0.74 0.78 0.84 0.95 0.97 1.04 1.07

Ex-Factory Price Ush per 50kg bag sugar (Excluding taxes)

75,00080,00085,00090,00095,000

Jan11

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec11

Year 2011

USh

(Exc

Tax

es)/5

0 kg

ba

g su

gar

KakiraKinyaraSCOUL

Ex-Factory Price US$ per kg sugar (Excluding Taxes)

0.60

0.70

0.80

0.90

Jan11

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec11

Year 2011

US$

(Exc

Tax

es) p

er k

g su

gar

KakiraKinyaraSCOUL

Ex-Factory Price Ush per 50 kg bag sugar (Excluding taxes) for year 2011

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Ush

(Exe

c T

axes

)/50

Kg

bag

suga

r KakiraKinyaraSCOUL

Ex-Factory Prices US $ per Kg sugar (Excluding Taxes) for the year 2011

0.00

0.20

0.40

0.60

0.80

1.00

1.20

US$

(Exc

Tax

es) p

er K

g su

gar Kakira

KinyaraSCOUL


UGANDA SUGAR CANE TECHNOLOGISTS ASSOCIATION

SUGAR PRODUCTION, NET IMPORTS AND ASSUMED CONSUMPTION STATISTICS APPENDIX 4

noteUganda Sugar Production Year 2008 2009 2010 2011 2012 2013 2014 2015 2020 2025 2030

Kakira 124,210 157,914 151,110 132,679 157,000 185,000 190,000 190,000 190,000 190,000 190,000 Kinyara 67,053 76,139 90,477 88,725 120,000 130,000 146,000 146,000 146,000 160,000 170,000 Lugazi 42,062 48,334 50,430 38,006 45,000 60,000 70,000 90,000 90,000 90,000 90,000

1 GM Sugar 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 1 Mayuge Sugar 2,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 2 Amuru 16,000 70,000 140,000 140,000 3 Others 10,000 15,000 20,000 50,000 100,000

Total supply of locally produced sugar 235,825 284,886 297,016 266,910 329,500 382,500 423,500 464,500 523,500 637,500 697,500 Export of Locally Produced Sugar 4 20,554 7,919 22,367 41,055 Net Locally Produced Sugar Consumed 215,271 276,967 274,649 225,855 Uganda Sugar Imports

Total imported sugar for consumption (net) 4 51,044 45,988 43,776 72,895

Total assumed consumption (Net Production + Net Import) 266,315 322,955 318,426 298,750

Sugar DemandPopulation Recorded 5 29,592,700 30,700,000 33,400,000 34,612,250Population Growth Rate 6 3.56% 3.50% 3.50% 3.50% 3.00% 3.00% 3.00%Population Forecast 35,823,679 36,678,012 37,077,508 38,375,220 39,526,477 45,822,020 53,120,280 Per capita consumption derived kg/hd/annum 9.0 10.5 9.5 8.6 Per capita consumption forecast 10.5 11.0 11.7 12.5 14.0 15.5 17.0

Total assumed consumption (Net Production + Net Import) 376,149 403,458 433,807 479,690 553,371 710,241 903,045

Forecast sugar net import / (export) 46,649 20,958 10,307 15,190 29,871 72,741 205,545

Notes 1 No data is exactly known for GM Sugar and Mayuuge Sugar, these are estimates.2 New project in Amuru being planned. Once finalised, cane developemnt will start in 2013 and sugar production could start in 20153 Other new project would include the plants of Sango Bay, the Alam Group in Kaliro , etc.4 Import and export data source URA. This is all C4 and C5 sugar less E1 sugar5 Population data from UBOS 2010 report (Mid year Population).6 Current UBOS Population growth rate is 3.56%, from 2021 this is down rated to 3%.

ACTUAL DATA PROBABLE DATA FORECAST DATA


Uganda Sugar Cane Technologists Association

UGANDA SUGAR PRODUCTION FORECAST 2012

APPENDIX 5

Month Kakira Kinyara SCOUL Others TOTAL CumulativeJan-12 16,300 12,000 4,200 650 33,150 33,150

Feb-12 15,400 10,500 3,600 650 30,150 63,300

Mar-12 14,500 12,000 2,000 612 29,112 92,412

Apr-12 16,300 11,500 3,600 612 32,012 124,424

May-12 - 10,500 2,500 612 13,612 138,036

Jun-12 10,500 10,000 4,000 612 25,112 163,148

Jul-12 14,100 11,000 4,200 612 29,912 193,060

Aug-12 14,600 11,000 4,100 612 30,312 223,372

Sep-12 14,200 10,500 4,200 612 29,512 252,884

Oct-12 13,100 5,000 4,200 612 22,912 275,796

Nov-12 12,500 5,000 4,200 652 22,352 298,148

Dec-12 15,500 11,000 4,200 652 31,352 329,500

TOTAL 157,000 120,000 45,000 7,500 329,500

Denotes Out of Crop (OOC) maintenance period

FORECAST PRODUCTION 2012

-

10,000

20,000

30,000

40,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

YEAR 2012

Suga

r T

onne

s

OthersSCOULKinyaraKakira


UGANDA SUGAR CANE TECHNOLOGIST's ASSOCIATION APPENDIX 6


MONTHLY NET SUGAR PRODUCTION (i.e less exports) and NET IMPORTED SUGAR CONSUMED (Direct consumption & raw material sugar. Source URA C4 & C5 Sugar)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

YEAR 2011

S

u

g

a

r

T

o

n

n

e

s

Sugar Locally Produced (Tonne)

Sugar Imports (Tonne)

UGANDA SUGAR CANE TECHNOLOGIST'S ASSOCIATION

COMPARATIVE FACTORY REPORTS 2011

APPENDIX 7

Production KAKIRA KINYARA SCOUL Totals

Cane milled tonne 1,471,829 885,384 483,065 2,840,278

Sugar bagged tonne 132,679 88,725 38,006 259,411

Molasses produced tonne 53,579 30,631 18,502 102,713

Molasses percent cane % 3.64 3.46 3.83

Milling rate tc per hr 241.96 162.78 104.88

Imbibition % cane % 41.04 40.30 35.94

Factory time efficiency % 92.42 94.32 81.26

Cane quality

Pol % cane % 11.10 11.82 10.59

Fibre % cane % 18.50 18.43 17.19

FEJ brix % 17.76 26.65 16.00

FEJ purity % 84.31 62.21 83.21

Final molasses purity % 31.23 37.17 34.68

Recoveries

Reduced mill extraction % 94.57 94.84 94.45

Reduced boiling house recovery % 89.45 88.35 82.78

Reduced overall recovery % 84.59 83.79 78.19

Recovery % cane (Rendement) % 9.01 9.96 7.90

Bagged recovery % cane % 9.01 10.02 7.87

Pol balance% Pol in cane

Pol in cane % 100 99 100

Pol in bagasse % 8.04 6.28 8.10

Pol in filter cake % 0.53 0.79 0.69

Pol in final molasses % 9.68 7.98 11.76

Pol in undetermined loss % 0.74 0.75 5.12

Pol total losses % 18.99 15.80 25.66

Fuel

Furnace oil litre - - -

Diesel oil litre 7,635 515,907 142,260


UGANDA SUGAR CANE TECHNOLOGIST'S ASSOCIATION

COMPARATIVE FACTORY REPORTS 2011

APPENDIX 81 of 6

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11Factory closed for annual maintenance the whole monthFactory closed for annual maintenance for part of the month

UnitKAKIRA SUGAR LTDProduction

Cane milled tonne 180,150.00 154,280.00 158,750.00 137,900.00 3,551.40 80,640.00

The 14th USCTA Annual Report 2011

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