Tanzanian sugar producer Kilombero Sugar Company, in which Illovo Sugar Africa holds a 75% stake and the government a 25% interest, has approved a TSh571.6-billion, or about $238.5-million, expansion project.
The expansion project, which is in alignment with Tanzania's policy to achieve self-sufficiency by 2025, will increase Kilombero’s sugar production by 144 000 t/y to 271 000 t/y.
“We are tremendously proud to be partnering with the Tanzanian people in what is a landmark investment aimed at reducing the amount of sugar which has to be imported into the country every year, to meet consumption demand.
"By effectively reducing sugar imports by 144 000 t, our estimates are that Tanzania will be saving $71 million a year in foreign exchange," comments Illovo Sugar Africa MD Gavin Dalgleish.
A driving force behind the manufacturing expansion will be the almost three-fold increase in cane supply from Kilombero’s small-scale growers, from 600 000 t currently to 1.7-million tons.
The number of small-scale farmers supplying cane to Kilombero is expected to increase from the current 7 500 to between 14 000 and 16 000.
Importantly, the proposed new sugar factory has been sized so that all of the available cane will be crushed by end of December each year, in order to minimise disruptions and losses often caused by the onset of the rainy season.
The expansion project, which is set for completion in July 2023, will include the construction of additional sugar storage and packaging facilities, as well as the cogeneration of electricity for the Kilombero manufacturing complex and for export to the national grid.
It will also result in a four-million-litre-a-year increase in the production of ethanol at the adjacent ethanol distillery to 16-million litres a year to meet growing local and East African export demand for potable alcohol.