AN OVERVIEW OF THE TANZANIA SUGAR
INDUSTRY
Contents
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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
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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
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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
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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.