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Sweet success dwells in Hoima surrounded by black gold

28th Jun, 2017

Hoima District came into the limelight after the discovery of oil. But Hoima Sugar Limited sought to explore another untapped potential of the area; sugarcane growing

A s an oyster forms a pearl from the proverbial grain of sand from the ocean deeps, so has Hoima district shaped up, little by little to play its part in the making of the true Pearl of Africa.

Hosting the kings of old and new of the Bunyoro-Kitara Kingdom, Hoima enjoys its status as part of the royal kingdom, housing the Royal Palace of the Omukama of Bunyoro-Kitara Kingdom.

The fortunes of the once remote town changed in 2006 following the discovery of oil and the construction of a highway.

The oil wells are located around Lake Albert about 25kms from Hoima Town and the oil deposits are estimated to be in excess of 2.5 billion barrels.

The flourishing greenery all along the 360 kilometre journey from Kampala to Hoima town, in Western Uganda flaunts the fertility of the land from mineral to seedling. Certainly fit for a king.

As expectations of its inhabitants grew, so did the influx of people into the town, setting the perfect stage for venturing and exploring another untapped potential of the area.

Oil had become the new gold here but hot on its heels was sugarcane farming, carrying with it the hopes and future of more than 40,000 inhabitants of the town.

“When we came here, there was nothing. No road, no electricity – nothing. Before, the road was so narrow that only a piki piki could pass,” recalls Hoima Sugar General Manager, Jayrama Ravi.

“We saw the potential in the area, and with the demand and supply gap of sugar in East Africa, decided to develop sugar production,” he added.

The factory and its surroundings were but a mere concept, almost a fleeting dream when the team arrived with their bulldozers and excavators to clear the bush and construct access roads before constructing the factory.

Road to success

Now, the 9 kilometre road from the main road leading to the factory is maintained by the factory and so are all roads surrounding the area, opening up the municipality.

The Greenfield project offered thousands of acres of untouched land which gave the investors freedom to build a sugar complex.

In 2014, construction of the Hoima Sugar Factory, which shares an expanse of 8,000 acres of land with the cane fields, began.

“As a Greenfield project, it was very challenging in the beginning as everything was bare and we had to imagine and create our own starting point. We did not even have any permanent structures and had to travel back and forth between the town and this location every day.”

For six months, Mr. J. Ravi and his team rented a room at the Hoima Resort Hotel as construction efforts picked up.

“We used to pay USh10,000 per room per night. Right now, you’d be lucky to find one for USh40,000 or Ush50,000.”

Opened up

Land prices and rental rates in Hoima have gone up exponentially, as demand for land in the town and surrounding areas grows.

As things began to shape up, a guest house was built onsite to accommodate the investors, until the factory was fully functional in 2016.

Today, there are multiple guest houses and offices adjacent to the factory. Hanging in one of the directors’ office is a framed, branded 50 kg packaging bag of Hoima sugar, adorned with the signature of Uganda’s President Yoweri Kaguta Museveni.

The factory was commissioned on May 1st, 2016. The day marked a promise of increased work opportunities and a better life for the residents of Hoima. Currently, the factory employs 2,000 people directly and 5,000 people indirectly.

KCB Bank financed the project with a capital expenditure loan of $17 million with an additional $3 million as working capital.

The current investment in the project is valued at more than $30 million with the factory hosting a processing capacity of 700-800 tonnes per day. When commercial production began in January 2016, the revenue generated stood at an impressive USh18 billion.

Perhaps the largest beneficiaries are the out-growers in the surrounding farms.

Hoima Sugar factory has an out-grower scheme of 2,000 acres, bringing its total nucleus to 10,000 acres.

“We are trying to partner with and develop business with the outgrowers. Previously, their land was just sitting idle but now, we are developing the area together with them. We foresee a boom in business over the next four to five years as the residents of Hoima enjoy a fixed income through this partnership,” says   Mr J. Ravi.

Inside the quaint, little soundproof offices, there is a light hum of activity, painting the picture of the mammoth factory at work.

The office, opens up into the belly of the factory where the grinding, crushing and processing all takes place.

“KCB Bank financed all our infrastructure needs – from machinery, the buildings, everything. As a local bank, KCB Bank understood us better. They understood the potential of the local market better, and the industry better than any international bank so we instantly chose to partner with them,” says Mr. J. Ravi.

KCB Bank

He continues, “Their turnaround time with decisions is impressive as the Board has established a respectable position of influence. They know the business prospects in the region and are conversant with the business environment, recognizing the substance of the venture and not just the paper.”

The promoters of Hoima Sugar have been operational in Uganda for the past 23 years with their first venture being the Nileply Plant in Jinja.

Hoima Sugar Limited runs on self- sustaining energy with a turbine powered generator – a byproduct of sugar processing.

And as their business grows, Hoima Sugar Limited plans to supply and sell the surplus power to the national grid and play their part in providing cheaper, cleaner energy.

A bold venture, this would cater to the small business activities and centres mushrooming around the factory as people develop a sweet tooth for the prospects the future holds.

KCB Bank are our trusted partners  

“KCB Bank financed all our infrastructure needs – from machinery, the buildings, everything. As a local bank, KCB Bank understood us better. They understood the potential of the local market better, and the industry better than any international bank so we chose to partner with them. They know the business prospects in the region and are conversant with the business environment, recognizing the substance of the venture and not just the paper,” says Mr. J. Ravi

 

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