AN OVERVIEW OF THE TANZANIA SUGAR INDUSTRY
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AN OVERVIEW OF THE TANZANIA SUGAR INDUSTRY. Contents. Background Stakeholders Industry’s Significance in the Country’s Economy Sugarcane Production Sugar Production Production vs Consumption Challenges Response to Challenges Conclusion. Background.

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Contents
Contents

  • Background

  • Stakeholders

  • Industry’s Significance in the Country’s Economy

  • Sugarcane Production

  • Sugar Production

  • Production vs Consumption

  • Challenges

  • Response to Challenges

  • Conclusion


Background
Background

  • The Sugar Industry in Tanzania is governed by the Sugar Industry Act, 2001 ( as amended), and Sugar Regulations (2010)

  • Four Sugar companies , Five Mills:

  • Kilombero Sugar ( two mills ) Msolwa and Ruhembe – Located in Kilombero and Kilosa Districts in Morogoro Region

  • TPC Ltd – Located in Moshi Rural District- Kilimanjaro Region.


Background cont
Background …Cont…

  • Mtibwa Sugar Estates located in Movomero District , Morogoro Region.

  • Before privatization all sugar companies were 100% owned by the government as parastatals managed by Sugar Development Corporation ( SUDECO).

  • They were privatized between 1998 and 2002


Background cont1
Background …Cont…

  • Government owns 25% equity in Kilombero Sugar Co. Ltd and TPC Ltd

  • Mtibwa Sugar Estates Ltd and Kagera Sugar Ltd are 100% divested to private investors


Background cont2
Background …cont…

  • Main objective for divesting the industry was to increase productivity in sugarcane and sugar production in terms of:-

  • increasing sugarcane yields

  • improving factory efficiencies

  • increasing crushing capacities


Background cont3
Background …cont…

  • rehabilitation and expansion of the factories

  • promotion of outgrowers

  • infrastructure development



Industry s significance in county s economy
Industry’s significance in County’s Economy

Annual revenue of agric sector- 3.8%

Multiplier effect – 3.2%

National Economy

Contributes 1% in Country’s GDP

Tax: Over Tsh. 100billion per annum

  • Employment

  • Direct 18,000

  • Indirect 57,000

  • Household value chain 75,000

Foreign exchange savings – About Tsh. 280billion per annum


Sugarcane production
Sugarcane Production

Varieties

  • Out growers

    Kilombero & Mtibwa: NCo376

    Kagera : Co 617

  • Nucleus estates

    TPC: NCo 376,B52-313,EA 7097,N19&N25

    Kilombero: NCo376,N19&N25

    Mtibwa: NCo376,

    Kagera Sugar: Co 617, N19 and N25


Production cont
Production.. Cont…..

  • Registered growers : 20,000

  • Plot sizes : From 0.4 to 400ha

    (Average 0.8ha )

  • Acreage : Area harvested 26,000ha


Production cont1
Production.. Cont…..

  • Cane production : 700,000 tons per annum

  • Cane yields : 40- 50 TCH

  • Production share : 24%



Sugarcane production by mcps
Sugarcane Production by MCPs

  • Area under cane : 62,569 ha

  • Area harvested : 44,194 ha

  • Cane production : 2.2 million tons

  • Cane yields : 70-120 TCH

  • Production share : 76%



Sugar production cont
Sugar Production …cont…..


Sugar production vs consumption
Sugar Production vs Consumption

  • Per capita consumption : 12.78 kg

  • Population growth : 2.8% per annum

  • Current Demand : 590,000 mt

  • Domestic cons. : 420,000mt

  • Industrial cons. : 170,000mt


Sugar production vs consumption cont
Sugar Production vs Consumption …..Cont…

  • Local production : 300,000 mt

  • Deficit : 290,000 mt

  • Deficit is addressed by importation with the applicable East African Community CET tariff with allowable remission


Challenges
Challenges

  • Low cane yields for out growers

  • Inadequate collateral and high borrowing interest rates particularly for out growers

  • Absence of government subsidy on inputs to cane farmers

  • Poor infrastructure/access roads to Outgrower fields


Challenges cont
Challenges….. Cont…

  • High cost of production

  • Inadequate capacity to provide effective and efficient research, training and extension services

  • Huge harvesting and post harvest losses

  • Market challenges (imbalances)

  • Inability to satisfy increasing demand


Challenges cont demand vs production
Challenges …..Cont… …. Demand vs Production

Population Projections

Historical

  • 1950 8

  • 1980 19

  • 2000 34

  • 2012 45

    Projection

  • 2015 49

  • 2020 56

  • 2025 64

  • 2030 72 Source:

  • Tanzania National Bureau of Statistics

  • United Nations, 2010 Revision



Response to challenges
Response to Challenges

  • A five year Industry Development Plan to 2015/16 was evolved aiming at self sufficiency and moderate surplus by plan end.

  • Existing factories were to expand capacities

  • New projects were to come on board


Response to challenges cont
Response to Challenges ….cont…

  • The National Development Plan to 2015 placed a huge challenge on the industry.

  • Aims at self sufficiency and realisation of 100,000mt surplus sugar by plans end.

  • Availability of suitable and unencumbered land has been identified as huge bottleneck to the relialisation of the plan. Need to debottleneck.


Response to challenges cont1
Response to Challenges ….cont…

  • The government has set up a Task Force to address the issue and recommend course of action.

  • Sugar is now a top agenda within the Government

    • Projects included in BRN portfolio

    • Compensation to free Ruipa land being processed

    • Land within Rufiji Basin on process to be free for investment into sugar


Response to challenges cont2
Response to Challenges ….cont…

  • Creating enabling environment for industry growth very crucial.

  • Need to protect the infant industry against market distortions.

  • Control of illegal imports/smuggling.

  • Building of trust amongst stakeholder groups particularly millers-growers.


Response to challenges cont3
Response to Challenges ….cont…

  • Institutional capacity building to deliver on regulation

    • Human capital development.

    • Development of financial resources.

    • Improvement of the legal and institutional framework to make it respond to the needs of the day.


Way forward
Way Forward

  • Industry Development Plan up for major overhaul

  • Calls for unity and conviction to have set goals realised

  • Goals should be as realistic as possible under the existing circumstances


Conclusion
Conclusion

  • There exists huge potential for the development of the Sugar industry in Tanzania

  • Players should always move in unity to have common interests realised and safeguarded

  • The industry should conduct itself in unquestionable way and seek to reach a stage where it can be trusted by its stakeholders particularly the government

  • The industry has huge potential to create wealth to its stakeholders and contribute immensely to the country economy as well as welfare of the common man in the street.



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