Uganda’s second largest sugar miller Kinyara Sugar opens US$15m industrial sugar refinery

UGANDA – Kinyara Sugar Limited, one of Uganda’s leading sugar processing companies, has inaugurated East Africa’s first industrial sugar refinery in Masindi District.

The plant, constructed at a cost of US$15m, is expected to produce 60,000 metric tons of industrial white sugar annually, consuming about 70,000 metric tons of mill brown sugar as raw material.

Officially commissioning the facility, President Yoweri Museveni lauded the initiative as it will cut on the country’s importation bill of the commodity which currently stands at US$50 million.

Refined sugar is majorly used in production of soft drinks, baked goods, confectionaries, pharmaceuticals, among other uses, with Uganda’s current demand ranging from 78,000 metric tons to 90,000 metric tons annually.

Establishment of the factory will enable the manufacturers to obtain the industrial sugar cheaply and timely, as it will cut on the long delivery time witnessed with imports.

Further showing governments support to the project, President Museveni, hinted that the country will commence imposing tax on imported industrial sugar to encourage growth of the sector locally.

In addition, the president is optimistic that once production increases, Uganda’s refined sugar will have a ready market throughout East Africa whose demand for industrial sugar is 150,000 metric tons. 

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“I will negotiate with these East African countries to buy our industrial sugar. And for us here we’re going to put a tax as soon as possible on the imported industrial sugar,” says Museveni.

The Board Chairman Kinyara Sugar limited Sarbjit Singh Rai said the expansion and addition of the new production line of refined sugar will not only increase production but also employment opportunities by 8,000 people.

With this factory, KSL owned by Sarrai Group, intends to strengthen its presence in the Ugandan sugar market, where it is the second largest player with 30% of sales behind Kakira Sugar Works.

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Other than Kinyara Sugar, Sarrai Group also owns Hoima Sugar, and Kiryandongo Sugar, a distillery, and power generation in Uganda.

Kinyara Sugar owner enters Kenyan market

The conglomerate has also made inroads into the Kenyan market by clinching a 20-year lease agreement of state-owned Mumias Sugar, in a bid to revive the collapsed miller.

Sarrai group’s winning bid has however been subjected to multiple court cases which are putting to doubt hopes of restoring the defunct miller to its former glory.

Dragged into the court battle is the owner of West Kenya Sugar, brother to the founder of Sarrai Group.

The Kenya based Rai Group company is also seeking to stamp its dominance in the local market with newly built sugar production unit, Naitiri Sugar Company.

Expected to kick-start operations by the end of the first quarter of this year, the new factory will commence with a processing capacity of 3,000 tonnes of sugar cane which will eventually be doubled to 6,000 tonnes.

Built at a cost of Ksh 5 billion (US$44m), the new factory will further extend its hold on the Kenyan sugar market where it already controls nearly 45% of total sugar sales through three companies: West Kenya Sugar, Sukari and Olepito.

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