Africa-Press – Tanzania. THE expansion of a 571.6bn/- (238.5 million US dollars) Kilombero Sugar Company (KSC) project has finally been approved by its shareholders and expected to be completed in July 2023.
The project was endorsed by Gavin Dalgleish representing Illovo Sugar Africa that holds 75 per cent shares and Athumani Mbuttuka, Treasury Registrar for Tanzania government, project co-investor through its 25 per cent shares in a meeting held in Dar es Salaam, recently.
The benefits to be accrued five years after commissioning the project will be significant in increase in cane volumes supplied by Kilombero growers tripling and revenue paid to them jumping to around 270bn/- by 2028.
“President Samia Suluhu Hassan’s profound commitment to creating a conducive environment for accelerated private-sector growth, underpinned by firm protective measures for the local sugar industry, have been decisive in securing approval of shareholders for this transformational project in the country,” said the KSC Chairman, Ambassador Ami Mpungwe.
He said the total number of small-scale farmers supplying cane will increase to between 14, 000 and 16, 000 growers from 7,500, thus positively impacting directly an additional some 50 000 people in the Kilombero valley surrounding the sugar operations.
There will also be an increase in direct employment by over 2, 000 jobs both at the company and through the expanded grower can supply.
In alignment with the country’s policy to achieve self-sufficiency by 2025, this new development will increase Kilombero’s sugar production by 144 000 tonnes to 271 000 tonnes, being the current levels of around 127 000 tonnes of sugar per annum.
A driving force behind the manufacturing expansion will be an almost threefold increase in cane supply from Kilombero’s small-scale growers, to 1,700 000 tonnes from 600 000 tonnes.
Importantly, the proposed new sugar factory has been expanded so that all of the available cane will be crushed by end of December each year, to minimise disruptions and losses often caused by the onset of the rainy season.
The approval demonstrates the continued support of Associated British Foods, Illovo Sugar Africa’s owner, and their confidence in the continued growth of Illovo in the African sugar market.
Speaking on behalf of Kilombero’s shareholder, Illovo Sugar Africa Managing Director, Mr Dalgleish further said that the investment in the expansion project is their biggest to date across the continent.
“We are tremendously proud to be partnering with the Tanzanian people in what is a landmark investment aimed at reducing the amount of sugar that has to be imported into the country every year, to meet consumer demand.
By effectively reducing sugar imports by 144, 000 tonnes, we estimate that Tanzania will be saving 71 million US dollars in foreign exchange annually,” said Mr Dalgleish.
The expansion project has been under discussion and planning by the company’s Board for several years and in addition to more than doubling current sugar production to meet increasing customer demand of Kilombero’s Bwana Sukari product range.
The project will also involve the construction of additional sugar storage and packaging facilities to reduce costs and increase the company’s branded pre-packaged capability; The cogeneration of electricity for the Kilombero manufacturing complex and export to the national Tanzanian grid; A 4,000 kilolitres increase in the production of ethanol at the adjacent ethanol distillery, bringing total annual production up to 16, 000 kilolitres to meet growing local and East African export demand for potable alcohol.
Total taxes of 66.8bn/- currently paid by the company are estimated to increase three-fold as a result of the expansion and improved business performance by 2028; Kilombero Sugar Company’s total contribution to the economy will more than double from the current 340bn/- per year to an estimated 750bn/-.
He further said that the Kilombero Sugar Company Board and management would like to take this opportunity to thank the government, Illovo Sugar Africa and the Kilombero growers for their unwavering support of the project since its conception, its employees and the many other stakeholders, partners, customers and suppliers who have encouraged and helped develop the company’s far-reaching expansion plans.
