Kabuye Sugar Works records over Rwf2b loss, blames floods

Rwanda’s sole sugar producer, Kabuye Sugar Works, is yet to recover from the effects of floods that submerged over 500 hectares of the firm’s cane plantations early this year. Now the company is asking for more government support to produce enough sugar to satisfy the market.

Good old days. Trucks deliver sugarcane at Kabuye Sugar. The firm is still suffering from effects of floods that hit early this year. The New Times / Timothy Kisambira

Kabuye sugar works has posted a Rwf2.4b loss, with the firm’s officials blaming the loss on floods that resulted from heavy rains the country experienced between March and April.

This loss comes on the heels of last year’s amounting to Rwf1.9b per annum also due to floods.

Kabuye Sugar Works, a subsidiary Ugandan-based Madhvani Group of Companies, is the sole sugar producer in Rwanda.

Thiru M. Navukkarasu, the Kabuye Sugar general manager, said floods destroyed about 500 out of 900 hectares of sugarcane.

He added that 1448 hectares out of the 3148 hectares of land allocated by the government in Nyabarongo and Nyabugogo areas were permanently submerged due to a poor drainage system.

Before the floods hit early this year, the firm had closed for two months for its annual factory maintenance. The period was, however, extended because of floods that submerged part of the factory and cane plantations.

“We can only be able to increase sugar production to match the demand if we have enough sugarcane,” said Navukkarasu. He made the remarks during a field visit to identify how the drainage system affects sugarcane yield that eventually affects the factory’s sugar production.

The factory’s sugar production remains low compared to the local demand. Currently, the firm produces 11,000 tonnes of sugar annually. This is not even a half of the annual sugar demand that stands at 70,000 tonnes of sugar, according to the Ministry of Trade and Industry.

Late year, Kabuye Sugar factory announced it would triple production to over 30,000 tonnes annually, but the officials said their efforts were still being frustrated by floods. According to the company officials, flooding is affecting sugarcane production and has reduced the quantity and quality of sugar.

The factory’s announcement came after government promised to partner with the company in a project that is expected to establish a modern drainage system that will significantly reduce the floods and enable Kabuye Sugar to use the land it was allocated by the government.

The drainage system is expected to cost 8m euros (aboutRwf7b) with support from the Dutch government worth 5m euros (about Rwf4.9b), while Kabuye Sugar Works will contribute 3m euros (about Rwf2.4b).

According to officials at the factory, flooding accounted for a loss of 35,000 tonnes of sugarcane, or about 3,200 tonnes of sugar per annum.

Jim Mwine Kabeho, the Kabuye Sugar Works director, called for government support if the firm is to satisfy the local sugar demand.

“The loss we incur affects our capacity…the lack of a proper drainage system is the main cause of this problem and must be addressed,” he said.

He noted that the factory needed government protection to ensure that it operates effectively until it ‘matures’.

He argued that it was nornal for governments globally to support firms that contribute greatly to their economies.

Kabeho said that currently, the factory was operating at half capacity because of lack of enough cane.

By Susan Babiija, The New Times

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