This is the business sector in which the Group commenced its activities in East Africa and remains an area of core competence for the Group.
This Company was formed in 1985 as a Joint Venture between the Madhvani Group and the Government of Uganda to take over the assets of Madhvani Sugar Works Ltd., which was the Group's flagship prior to 1972. At the time of take-over in 1985, owing to the economic turmoil in the intervening years as well as inadequate management whilst under Government control, the factory was no longer in production and most of the nucleus estate had reverted to bush.
Under the Group's management, the Kakira sugar complex was fully rehabilitated with financing of US$ 60 million from the World Bank, the African Development Bank and Uganda Development Bank.
The sugar factory has been expanded steadily and is currently operating at a crushing capacity of 6,000 Tons Cane per Day ["TCD"] during a 10.5 month crushing season. A confectionery factory within the complex also produces a variety of sweets and toffees and other confectionery items.
Sugar-cane is cultivated on the company's own nucleus estate of over 9,700 hectares (Ha) but the majority of the cane is supplied from 6,000 outgrower farmers with more than 18,000 hectares under cane, for production of 150,000 Tons of sugar per year - making this Uganda's largest sugar producer. To cater to the needs of the agricultural development of Kakira, the Company established a sugarcane nursery for treated seed cane, a full fledged Agronomy Section with an Applied Research Centre.
The Company employs over 7,500 people and has been responsible for the socio-economic development of this rural area.
In addition to direct employment, Kakira's activities support the local community – outgrower farmers, cane transporters, ancillary and support industries, etc. This has contributed significantly to the Ugandan Government's poverty alleviation programme. Including dependent families, Kakira Sugar Works provides the means of livelihood to over 75,000 people in the South Busoga region of Uganda.
The Kakira rehabilitation is considered by the World Bank and the African Development Bank to be one of their most successful projects on the continent. It is an outstanding example of industry turn-around under private sector management. Its success is the best example of the Madhvani Group's track record in the sugar industry.
The Group has completed an extensive phased programme for expansion which enhanced Kakira's crushing capacity to 6,000 TCD to produce more than 150,000 tons of sugar each year. The agricultural expansion plan includes increasing the Outgrowers area under cane to 20,000 Ha. The expanded co generation plant is already producing steam as well as 22 MW of electric power including 12 MW for sale to the national grid. The sugar expansion was partly financed by a loan of US$ 10.7 million from FMO. Since the co generation expansion is based on a renewable bio-mass fuel, it is being supported by a US$ 3.3 million grant from the Global Environment Fund as well as loans of US$ 8.6 million from the East African Development Bank. The project will also earn Carbon Emission Reduction credits from the World Bank. The balance funding of the total project cost of over US$ 50 million is from own resources as well as medium-term loans from local commercial banks.
Following the expansion and co generation project at KSW, further plans are being formulated by the Madhvani Group. These include the production of 60,000 Litre/day of anhydrous ethanol from molasses – to blend with petrol (to reduce fuel imports), setting up of a new 2,500+ Tons Cane per Day sister sugar complex in Amuru District in Northern Uganda, and 'Jatropha' cultivation to produce bio-diesel (another renewable bio-fuel option).