Local industrial sugar making plan hailed

Thursday October 10 2019

 

By Alfred Zacharia @azacharia3 azacharia@tz.nationmedia.com

Dar es Salaam. Tanzania will start producing industrial sugar in the coming 21 months, the sector’s regulator has said - thus bringing hope to consumers of the product that they will finally source the product locally.

In a statement posted on the website of the ministry of Agriculture, the Sugar Board of Tanzania (SBT), says actual production would start in June 2021.

SBT said it was working to attract investors who will produce at least 50,000 tonnes of the product by June 2021 - noting, however, that efforts were being deterred by the ten per cent import duty on the product.

“The ten per cent import duty on industrial sugar is a disincentive to those seeking to invest in production of the product locally,” the statement reads. Tanzania’s annual demand for industrial sugar is 170,000 tonnes.

With no local manufacturer, the product is imported, mostly from Brazil, Thailand and other Southeast Asian countries at an import duty rate of ten per cent.

Local sugar producers hailed the move, saying if all the other parameters are put in place, then they would invest in local production of industrial sugar.

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Kilombero Sugar Company Limited (KSCL) tried to produce industrial sugar in 2008 before it closed the line due to market suffocation.

But the company remains optimistic that - should there be a system to check the market from being flooded with cheap imports - they would seriously consider investing in production of the commodity.

“As things stand, Tanzania remains a dumping site for subsidized imports. Our plans to revive industrial sugar production are still there - but only when imports are controlled,” the KSCL board chairman, Ami Mpungwe, told The Citizen on the telephone yesterday.

Mr Mpungwe told The Citizen in May this year that President John Magufuli’s resolve to deal with politics related to sugar imports had rekindled hope for more investment in the sector from local manufacturers.

“President John Magufuli has been very clear on protecting sugar producers from the very first day he assumed power. And this happened without even lobbying. It must be clear that we, as sugar producers, do not want a ban on importation. What we want is that importation should be of the right quantity and quality and at the right time,” he said in May.

He said when allowing imports, it was important to note that some countries were heavily subsidizing their sugar industries.

Consumers of industrial sugar say once implemented, the proposal by the SBT would help them defeat the hurdles that they go through when importing the product.

“Locally produced industrial sugar will save time and import costs. The accessibility of the raw material will also be assured because presently, we are forced to have huge storage facilities in case of import delays,” the corporate affairs director for Said Salim Bakhresa (SSB), Mr Hussein Sufian, told The Citizen yesterday.

He said although the planned initial production volume of 50,000 tonnes was small compared to market requirements, it was still a good plan and the right amount to start with.

“All I can recall is that quality standards of the produce must be competitive and production must be sustainable,” he said.

The head of public affairs and communications at Coca-Cola Kwanza, Mr Haji Mzee, shared similar sentiments, noting that the plan would enhance easy access of industrial sugar and eventually cut down prices.

“The amount is too small to accommodate all players in the industry; but it is a good beginning - and it is encouraging,” Mr Mzee told The Citizen.

Additional Reporting by Alex Malanga.