What you need to know:
- The anticipated modern facility being built in Moshi is said to offer a new beginning and a lifeline for smallholder barley farmers in Tanzania who lack a reliable market for their produce
Statistics show that the production of barley in Tanzania increased from 440 tonnes in 1972 to 20,546.3 tonnes in 2021, growing at an average annual rate of 13.11%. However, despite this growth rate, farmers decried the lack of a stable market for their produce.
As a result of the farmers’ plight, the much anticipated Kilimanjaro Malting Plant that is being built in Moshi is set to bring about positive changes that will benefit farmers across Tanzania.
As it was expressly stated by the Minister of Agriculture, Hussein Bashe, during the investment launch ceremony in Dodoma on June 7, the multibillion-shilling investment by Tanzania Breweries Limited puts Tanzania in the right direction that will lead to the export of barley once the plant is fully operational.
Tanzania is not among Africa’s top 10 barley producers. But, by establishing a facility that will be able to malt the barley using modern technology, the odds are in Tanzania’s favor to increase the production of barley and become a major exporter on the continent.
This potential lies in the fact that the revival of the malting facility will see the plant’s capacity for processing barley, a key ingredient in the production of beer, shoot up to 32,000 tonnes a year from 15,000 tonnes previously.
Bashe echoed this optimism, which rings positive for the agricultural sector. He said that he will personally see to it that the barley production target is met. What this means is that the concerted efforts between the government and TBL can potentially change the fortunes of the entire crop that was plagued with uncertainty.
This revival and the projected benefits to farmers are stories that date back to the early years when the Moshi Malting Plant was in operation.
TBL was forced to halt operations at the plant due to high operating costs, particularly water and energy running costs, owing to outdated technology.
"We were forced to make that decision as the operational costs became prohibitive. Once revived, we will minimise costs through new-age technology," Mr Joel Msechu, a senior TBL official.
The new-age technology Msechu referred to in 2022 when TBL made the announcement of the planned revival of the malting plant is known as RimoMalt.
RimoMalt is the first fully modular all-in-one standardised malting technology developed by Swiss equipment manufacturer Bühler and represents a breakthrough in the malting industry as it offers a plant structure that can grow with the demands of customers.
The new malting plant is a fortune for barley farmers in the country, where some 17,500 outgrowers will be engaged in contract farming to cultivate barley as raw material to feed the local company.
Speaking during the launch, Mr Bashe said the Kilimanjaro Malt Plant will be in Moshi, where some 17,500 farmers will be engaged in contract farming to cultivate barley as raw material to supply to TBL for further processing.
Mr Bashe noted that the exercise will be supervised concurrently by TBL and the government. He further said it will be a blessing to barley farmers in the regions, including Manyara, Kilimanjaro, Mbeya, and Rukwa.
Apart from benefiting farmers, the new plant will set the stage for Tanzania to benefit from the Africa Continental Free Trade Area as a signatory member. The trade bloc provides a wide market for the produce and ensures Tanzania not only becomes a major exporter of malted barley but also a leader in the use of modern technology.
Supporting this ambition, Bashe said plans are ahead to ensure that in the coming three years, Tanzania will not be importing any more malted barley but instead will be exporting it to other countries.
Tanzania exported $81.4k in barley in 2021, making it the 64th largest exporter of barley in the world. In the same year, barley was the 499th most exported product in Tanzania. The main destinations of barley exports from Tanzania are Uganda ($81.4k) and Ireland ($3).
The fastest growing export markets for barley of Tanzania between 2020 and 2021 were Uganda ($64.5k) and Ireland ($3).
In 2021, Tanzania imported $148k in barley, becoming the 102nd largest importer of barley in the world. In the same year, barley was the 849th most imported product in Tanzania. Tanzania imports barley primarily from Kenya ($126k), Uganda ($20.8k), United Arab Emirates ($239), the United Kingdom ($238), and the Netherlands ($112).
The fastest-growing import markets in barley for Tanzania between 2020 and 2021 were Kenya ($126k), Uganda ($20.8k), and the Netherlands ($112).
In 2018, the average tariff for Tanzanian barley was 11.8 percent. The countries with the highest import tariffs for barley were Angola (Most Favoured Nation duty rate treatment, 12.5 percent), Benin (Most Favoured Nation duty rate treatment, 12.5 percent), Burkina Faso (Most Favoured Nation duty rate treatment, 12.5 percent), the Central African Republic (Most Favoured Nation duty rate treatment, 12.5 percent), and Cote d'Ivoire (Most Favoured Nation duty rate treatment, 12.5 percent).
Going by the import and export statistics, Tanzania has room for growth in the barley business, and if fully utilized, the commodity could generate way more than the projected Sh226 billion in revenue for the government.
TBL’s Moran said the Kilimanajro Malting Plant project will be implemented in phases, where the first for 2023/24 fiscal year will involve investing 10.5 million US dollars to produce the 12,000 metric tonnes of malt.
He noted that the phase will automatically boost local production and raise the morale of farmers to cultivate more, especially by building their capacity and providing seed variety testing support from the company.
Phase two, which will be implemented in the 2024/25 fiscal year, will involve scaling up the project's construction to produce 16,000 metric tonnes of malt with an investment of about 6.3 million US dollars.