Rwanda’s Madhvani Group to invest US$92m in sugarcane production scheme

RWANDA – The Madhvani Group Rwanda, the parent company of Kabuye Sugar Works Limited, is set to invest up to US$92 million in setting up sugar production scheme to boost local sugar production.

The multi-million dollar investment will see the company establish a sugar cane processing factory with an annual production capacity of 56 000tonnes (about 80 per cent of the national demand) as well as about 5500 hactares of cane plantation.

According to Joel Uwizeye, Director of Corporate Affairs at Madhvani Group, the project is set to cushion the firm from continued losses associated to loss of sugarcane resulting from flooding in its current plantations.

Mr Uwizeye noted that the group has identified suitable plantation sites in highlands regions of Bugesera District where the firm will deploy drip irrigation technology.

Kabuye Sugar Works revealed that it will lose US$7.2 million (Rwf6.6bn) in potential revenues after floods destroyed its 2,000 hectares of sugarcane which is the main raw material in its sugar processing plant, reports New Times.

Mr Uwizeye said that the plantation destroyed was part of a project initiated in 2013 through US$8.84 million (Rwf8bn) project in partnership with the governments of Rwanda and Netherlands, to bring wasteland under cultivation.

However, he said that persistent flooding is one of the main drivers of the factory’s high cost of production.

“Our marshlands have been persistently facing heavy floods, year by year. We grow sugar cane today, put a lot of money, put a lot of fertilisers, employ people for planting, weeding or other related activities.

But, at the end of the day, rain comes and sweeps away everything. To our dismay, all the 2,000 hectares were affected by the floods of last year,” he observed.

Kabuye Sugar produced 10,000 tonnes in 2018, at about 60% of its annual production capacity of 17,000 tonnes, as floods destroyed some 40 per cent of its total sugarcane plantations.

According to the company a total of 4350 hectares of sugarcane plantations, including outgrowers’ farms were under the crop during the season.

Uwizeye notes that the firm is also yet to sell 1,000 tonnes of sugar produced during the season which it withholds due to the current market, thereby projecting Rwf16 million (US$17.6k) loss especially in the wake of cheap imported subsidised sugar.

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