Members of Parliament have discovered that some sugar millers in Uganda have acquired licenses to establish factories but have not done so, in violation of the Sugar Act, 2020. The Act states that a company granted a license must commence business within three years.
The discovery was made during an oversight visit by the Committee of Tourism, Trade and Industry in response to a petition filed by the Uganda Sugar Manufacturers Association (USMA) against new millers in Busoga and Buganda sub-regions. USMA alleges that the Ministry of Trade, Industries and Cooperatives has licensed new millers who are not adhering to the Sugar Policy’s 25KM radius restriction.
MPs also found that some existing millers, including Sugar Corporation of Uganda Limited (SCOUL) and Madhvani Group, have held licenses for 10 years to operate factories in Kayunga District but have not done so. Instead, they have established nucleus farms and out growers, but the cane is transported to their factories in Lugazi and Jinja, respectively.
The MPs questioned the motive behind acquiring licenses without building factories and suggested that this is preventing other players from entering the sugar industry.
The Regional Director of SCOUL, Suresh Sharma, defended the company’s actions, saying that they are concerned about the failure of new millers to adhere to the 25KM radius. He cited the new miller, Shakti Sugar, as an example, saying that the company is likely to poach cane from Mehta’s out growers.
The Chairperson of USMA and Director of Madhvani Group, Jim Kabeho, justified the delay in establishing the factory in Kayunga by saying that the crushing capacity in Jinja is still low. He also called for the expeditious setting up of a Sugar Board as established under the Sugar Act, which would be responsible for licensing millers.
MPs also met with new millers, including Kidera Sugar Company in Buyende District, Kikajjo Sugar Company and CN Sugar Company both in Namayingo District. They discovered that all three companies lack the capacity to operate factories. CN, for example, was licensed in 2022 but only has 200 acres of land, against a target of 20,000 acres.
The Committee Vice Chairperson, Hon. Catherine Lamwaka, said that the committee will meet with the Ministry of Trade to address policy gaps and ensure that regulations are fair to all players.
The Committee of Tourism, Trade and Industry has discovered that some sugar millers are holding licenses without building factories, in violation of the Sugar Act, 2020. This is preventing other players from entering the sugar industry and potentially causing harm to cane growers. The committee has called for the expeditious setting up of a Sugar Board to address these issues.