Future Projects

Ethanol Project - Kakira

Kakira Sugar has been working on the Anhydrous Ethanol Production Project ever since May 2008 after the Government of Uganda [GOU] formulated its Renewable Energy Policy in November 2007 through the Ministry of Energy and Mineral Development [“MEMD”]. Uganda’s Renewable Energy Policy supports the blending of bio-fuels with petrol and diesel up to 20%.

KSL started the preparation of the Business Plan for the ethanol project which involves setting up a distillery at Kakira that can produce about 60,000 litres of ethanol per day - say 18 million litres of ethanol annually from 74,000 Tons of molasses, which will be available after completion of the KSL further Expansion Project.  This would be blended with petrol by the oil companies prior to selling the same to the motorists.  Uganda currently consumes approximately 250 million litres of petrol. Therefore KSL’s ethanol production can blend up to 7.2% of the petrol consumed in the country.

In November 2008, KSL appointed a Technical Consultant (Avant-Garde Engineers & Consultants Ltd. from India) to carry out a detailed techno-economical feasibility analysis.  The Consultant studied the existing plant and infrastructure at Kakira and prepared a basic engineering concept for the KSL anhydrous ethanol project.

According to the Consultant’s Draft Report of June 2009, the Kakira Anhydrous Ethanol Production Project is estimated to cost US$ 35 million.

Whilst MEMD’s Renewable Energy Policy envisages mandatory blending, the practical procedures for blending and distribution of the ethanol-blended petrol by the oil companies have not yet been formalised. 

Government of Uganda through MEMD is now in advanced stages of formulating enabling legislations for the blending while UNBS is developing standards for the ethanol and ethanol blended fuel in Uganda.  The enactment of the enabling legislations including Regulatory Framework, Tax Incentives, Standards, Handling / Storage, Pricing, Blending Facilities for ethanol and blended fuel products and Environmental Aspects of ethanol projects is in place.

KSL will start the project implementation in earnest as soon as the appropriate enabling legislations and national standards for the blended fuel are in place.

New Sugar Complex in Southern Sudan - Mongala Sugar Works

The Madhvani Group was invited by the Government of Southern Sudan [GOSS] to explore the possibility of establishing a sugar complex in Southern Sudan.  A team of senior agricultural and technical experts from Kakira Sugar Works (1985) Limited visited various potential sites for cultivation of sugarcane and establishment of a sugar factory in Southern Sudan.

Based on our team’s preliminary findings, it is envisaged that the Mongala District would be best suited for sugarcane cultivation and sugar manufacturing – considering land, climate, water availability, etc.

The Madhvani Group’s plan for Mongala Sugar Works includes the following :

• The Nucleus Estate (of around 45,000 hectares) allocated to the Sugar Company, which would not only cultivate sugarcane for supply to the Company-owned sugar factory but also develop and grow seed-cane in controlled conditions in a nursery for use by the Company as well as by sugarcane outgrower farmers. 

  Outgrower Farms (of around 15,000 hectares of which 9,000 hectares will be under cane after phased development).

  The new Sugar Company would not only supply seed-cane to these Outgrower Farmers, but would also provide complete extension services, which will include advice on land suitability, land development, land preparation, planting techniques, maintenance practices, use of agro-chemicals (fertilizers, weedicides and pesticides), harvesting, land/soil improvement and other crop husbandry practices.

  The Company would also arrange for mechanized agricultural equipment for land development and preparation.

• The sugar factory would be developed in phases, starting with a capacity of 3,500 Tons Cane per Day [TCD], which would subsequently be expanded to 5,000 TCD and then to 10,000 TCD.. In the first phase, this factory would work 8 months of the year (24h/d) to process 840,000 tons of sugarcane (including 210,000 tons from outgrowers) to produce around 80,000 tons of sugar and 29,000 tons of molasses per year. In subsequent phases, the expanded factory would steadily increase its sugarcane cultivation from the nucleus estate as well as from outgrowers to produce over 200,000 tons of sugar each year.

• The sugar factory will use modern technology and high-pressure boilers, to generate adequate electricity to not only meet its own in-house needs, but also for supply to the grid for use by the population of the adjacent area.

• The sugar company would also develop the required infrastructure for its operations.  This would include offices; stores for consumables; workshops for factory mechanical and electrical equipment as well as for agricultural equipment; staff housing; workers camps; schools for all employees; a central hospital (as well as a mobile health unit); staff recreational facilities; etc. Development of a sugar complex requires development of roads in the Outgrower area, which benefit the entire community who grow food and other crops in addition to sugarcane.

  In addition, the normal social infrastructure (hospitals/medical centres, schools, petrol stations, retail shops, etc.) would be developed in the surrounding areas.

The initial estimate of the capital cost for the first phase of such a project is around US$ 90 million with 30% shareholding by GOSS.

Madhvani Group and GOSS have signed a Memorandum of Understanding for the establishment of a new sugar complex in December 2009.  The demarcation and allocation of the land to the company will be done by GOSS in the first quarter of 2010.

The project will have immense socio-economic impact - substantial agricultural potential for small farmers as well as for industrial employment, as well as the major components of development of social infrastructure, which would enable poverty alleviation and socio-economic development. 

Exploring Tourism Opportunities in India

The Tourism Sector in India has witnessed dramatic growth in the last few years in terms of the demand supply gap in the hotel sector for both international and domestic tourism, aided by the reforms and liberalization of the Indian Economy.

Against this background the Madhvani Group decided to venture into the Indian Tourism Sector with the objective of setting up 3-4 star accommodation to cater to both Hindu and Buddhist religious tourism circuits.

Substantial progress has been achieved to date with the acquisition of an existing hotel in Rajkot, Gujarat, and green field sites in Rishikesh and Tirupati. Other project developments are in the pipeline. These 100 room branded units will be developed in the next 24 months and will provide accommodation to a segment where substantial opportunities exist in terms of limited available occupancy at the selected locations, against a background of an annual inflow of over 6 million international tourists and over 100 million domestic tourists with a strong religious following.