Tanzania’s Kilombero Sugar Company (KSC) recently confirmed its TZS 571.6 billion expansion project to increase its sugar production by 144,000 tons from current levels of around 127,000 tons of sugar per year to 271,000 tons.
The announcement was made by the Group Head of Sales Ephraim Mafuru at the 20th Conference of Financial Institutions (COFI) held in Dodoma on 26th November 2021.
Located in the Morogoro region in the center-south of the country, Kilombero Sugar Company is owned for 75% by Illovo Sugar Africa and for 25% by the Government of Tanzania.
Illovo Sugar Africa is Africa’s largest sugar producer and has agricultural operations in six southern African countries, manufacturing sugar from cane supplied by its own agricultural operations and independent growers.
Behind the manufacturing expansion in Tanzania is the expected increase in the sugar cane sourced from growers by nearly an additional one million tons per year from the current 600,000 tons to 1.7 million tons by 2026/27.
The proposed new sugar factory has been sized so that all of the available cane will be crushed by end of December each year and minimize disruptions and losses often caused by the onset of the rainy season.
The project construction phase is expected to take 25 months and completion is expected in July 2023.
Mafuru-who was speaking as a panelist at the conference on the topic of scaling up credit to the private sector-explained that the new plant will be a key enabler in supporting the government’s economic recovery strategies.
The expansion in sugar production will mean that the government will save about USD 70 million in foreign exchange that is currently spent on sugar imports, and will create the much-needed jobs to get the economy up and moving.
Mafuru said that the expansion will create 2,000 permanent and 2,440 contracted jobs, and install 10-15MW of electricity generation from renewable fuel available for the Tanzanian grid through a suitable Power Purchase Agreement (PPA) with the Tanzania Electric Supply Company (TANESCO).
Tanzania’s sugar annual demand is estimated at 710,000 tons in 2019 versus a local production of 439,100 tons in the same year.
Sugarcane farming and processing in Tanzania is very limited and cannot meet the national demand and the gap is filled with sugar imports.