An Overview of the Tanzania Sugar Industry
AN OVERVIEW OF THE TANZANIA SUGAR INDUSTRY Contents Background Stakeholders Industry’s Significance in the Country’s Economy Sugarcane Production Sugar Production Production vs Consumption Challenges Response to Challenges Conclusion 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. 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 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 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 Background …cont… rehabilitation and expansion of the factories promotion of outgrowers infrastructure development Stakeholders •Sugar Producers •Development Trust Fund •Training and Research •Outgrowers •- Mtibwa •-Kagera •-Kilombero Ministry of Agriculture Food Security and Cooperatives Sugar Board of Tanzania •Traders/ Importers •Users of Ind. Sugar •Confederation of Tanzania Industries OTHER Ministries -Finance -Industry and Trade -E A Cooperation Tanzania Revenue Authority •Retailers •Consumers •Chambers- Industry, Commerce and Agriculture Industry’s significance in County’s Economy Annual revenue of agric sector- 3.8% Contributes 1% in Country’s GDP Foreign exchange savings – About Tsh. 280billion per annum Multiplier effect – 3.2% National Economy Tax: Over Tsh. 100billion per annum Employment -Direct 18,000 -Indirect 57,000 -Household value chain 75,000 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 Production.. Cont….. Registered growers : 20,000 Plot sizes : From 0.4 to 400ha (Average 0.8ha ) Acreage : Area harvested 26,000ha Production.. Cont….. Cane production : 700,000 tons per annum Cane yields : 40- 50 TCH Production share : 24% SUGARCANE PRODUCTION BY OUTGROWERS 600000 500000 400000 300000 200000 100000 Kagera growers are less tha n 600 0 YEAR 2008/09 Kilombero 2009/10 Mtibwa 2010/11 2011/12 Kagera 2012/13 Sugarcane Production by MCPs • Area under cane Cane production : : : 62,569 ha 44,194 ha 2.2 million tons Cane yields : 70-120 TCH Production share : 76% Area harvested Cane Production by MCPs …. Cont…. 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 YEAR 2008/09 2009/10 2010/11 2011/12 2012/13 Kilombero Mtibwa TPC Kagera Sugar Production (2008/09-2012/13) Period Kilombero Mtibwa Sugar Sugar Estate Kagera TPC Ltd 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 2013/14* 116,618 26,491 100,000 46,242 299,698 289,351 Sugar Production …cont….. 310,000 TONNES OF SUGAR 300,000 290,000 280,000 TOTAL 270,000 260,000 250,000 240,000 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14* 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 Sugar Production vs Consumption …..Cont… Local production Deficit : 300,000 mt : 290,000 mt Deficit is addressed by importation with the applicable East African Community CET tariff with allowable remission 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 Challenges….. Cont… High cost of production Inadequate capacity to provide effective and efficient research, training and extension services Huge harvesting and post harvest losses Market challenges (imbalances) Inability to satisfy increasing demand 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 Challenges …..Cont… 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 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. 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 Response to Challenges ….cont… 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… 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. 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 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. Ahsanteni na Karibuni sana.
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