Download - AN OVERVIEW OF THE TANZANIA SUGAR INDUSTRY
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AN OVERVIEW OF THE TANZANIA SUGAR INDUSTRY
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Contents
Background Stakeholders Industry’s Significance in the Country’s
Economy Sugarcane Production Sugar Production Production vs Consumption Challenges Response to Challenges Conclusion
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Background
The Sugar Industry in Tanzania is governed by the Sugar Industry Act, 2001 ( as amended), and Sugar Regulations (2010)
Four Sugar companies , Five Mills:Kilombero Sugar ( two mills ) Msolwa and
Ruhembe – Located in Kilombero and Kilosa Districts in Morogoro Region
TPC Ltd – Located in Moshi Rural District- Kilimanjaro Region.
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Background …Cont…
Mtibwa Sugar Estates located in Movomero District , Morogoro Region.
Before privatization all sugar companies were 100% owned by the government as parastatals managed by Sugar Development Corporation ( SUDECO).
They were privatized between 1998 and 2002
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Background …Cont…
Government owns 25% equity in Kilombero Sugar Co. Ltd and TPC Ltd
Mtibwa Sugar Estates Ltd and Kagera Sugar Ltd are 100% divested to private investors
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Background …cont…
Main objective for divesting the industry was to increase productivity in sugarcane and sugar production in terms of:-
increasing sugarcane yields
improving factory efficiencies
increasing crushing capacities
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Background …cont…
rehabilitation and expansion of the factories
promotion of outgrowers
infrastructure development
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Stakeholders
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Industry’s significance in County’s Economy
National Econom
y
Multiplier effect – 3.2%Multiplier effect – 3.2%
Tax: Over Tsh. 100billion per annumTax: Over Tsh. 100billion per annum
Employment-Direct 18,000
-Indirect 57,000-Household value chain
75,000
Annual revenue of agric sector- 3.8%
Contributes 1% in Country’s GDP
Foreign exchange savings – About Tsh. 280billion per annum
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Sugarcane Production
Varieties Out growers Kilombero & Mtibwa: NCo376 Kagera : Co 617
Nucleus estates TPC: NCo 376,B52-313,EA
7097,N19&N25 Kilombero: NCo376,N19&N25 Mtibwa: NCo376, Kagera Sugar: Co 617, N19 and
N25
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Production.. Cont…..
Registered growers : 20,000
Plot sizes : From 0.4 to 400ha
(Average 0.8ha )
Acreage : Area harvested 26,000ha
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Production.. Cont…..
Cane production : 700,000 tons per annum
Cane yields : 40- 50 TCH
Production share : 24%
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Kagera growers are less tha n
600
Kagera growers are less tha n
600
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Sugarcane Production by MCPs
• Area under cane : 62,569 ha Area harvested : 44,194 ha
Cane production : 2.2 million
tons
Cane yields : 70-120 TCH
Production share : 76%
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PeriodKilombero
Sugar Mtibwa
Sugar Estate TPC LtdKagera
Sugar Ltd TOTAL
2008/09
118,023 42,863 78,483 40,482 279,852
2009/10
119,623 40,029 68,616 35,193 263,461
2010/11
126,824 47,301 85,928 44,082 304,135
2011/12
113,100 28,269 86,148 35,362 262,879
2012/13
129,737 38,794 86,078
45,089 299,698
2013/14* 116,618 26,491 100,000
46,242 289,351
Sugar Production (2008/09-2012/13)
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Sugar Production …cont…..
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Sugar Production vs Consumption
Per capita consumption : 12.78 kg
Population growth : 2.8% per annum
Current Demand : 590,000 mt
Domestic cons. : 420,000mt
Industrial cons. : 170,000mt
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Sugar Production vs Consumption …..Cont…
Local production : 300,000 mt
Deficit : 290,000 mt
Deficit is addressed by importation with the applicable East African Community CET tariff with allowable remission
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Challenges
Low cane yields for out growers
Inadequate collateral and high borrowing interest rates particularly for out growers
Absence of government subsidy on inputs to cane farmers
Poor infrastructure/access roads to Outgrower fields
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Challenges….. Cont…
High cost of productionInadequate capacity to provide effective and efficient
research, training and extension services Huge harvesting and post harvest lossesMarket challenges (imbalances) Inability to satisfy increasing demand
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Challenges …..Cont… …. Demand vs Production
Population Projections Historical 1950 8 1980 19 2000 34 2012 45
Projection 2015 49 2020 56 2025 64 2030 72
Source: Tanzania National Bureau of Statistics
United Nations, 2010 Revision
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Challenges …..Cont…
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Response to Challenges
A five year Industry Development Plan to 2015/16 was evolved aiming at self sufficiency and moderate surplus by plan end.
Existing factories were to expand capacities
New projects were to come on board
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Response to Challenges ….cont…
The National Development Plan to 2015 placed a huge challenge on the industry.
Aims at self sufficiency and realisation of 100,000mt surplus sugar by plans end.
Availability of suitable and unencumbered land has been identified as huge bottleneck to the relialisation of the plan. Need to debottleneck.
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Response to Challenges ….cont…
The government has set up a Task Force to address the issue and recommend course of action.
Sugar is now a top agenda within the Government Projects included in BRN portfolio Compensation to free Ruipa land being
processed Land within Rufiji Basin on process to be free
for investment into sugar
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Creating enabling environment for industry growth very crucial.
Need to protect the infant industry against market distortions.
Control of illegal imports/smuggling.
Building of trust amongst stakeholder groups particularly millers-growers.
Response to Challenges ….cont…
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Institutional capacity building to deliver on regulation
Human capital development. Development of financial resources. Improvement of the legal and institutional
framework to make it respond to the needs of the day.
Response to Challenges ….cont…
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Way Forward
Industry Development Plan up for major overhaul
Calls for unity and conviction to have set goals realised
Goals should be as realistic as possible under the existing circumstances
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Conclusion
• There exists huge potential for the development of the Sugar industry in Tanzania
• Players should always move in unity to have common interests realised and safeguarded
• The industry should conduct itself in unquestionable way and seek to reach a stage where it can be trusted by its stakeholders particularly the government
• The industry has huge potential to create wealth to its stakeholders and contribute immensely to the country economy as well as welfare of the common man in the street.
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Ahsanteni na Karibuni sana.