Since its privatisation in 1998, the year in which Illovo Sugar Africa acquired Kilombero Sugar, this local business in the heart of the Morogoro Valley in Tanzania, has undergone remarkable growth having increased annual sugar production from an average of 30 000 tons per annum to around 130 000 tons today – selling to consumers across the country under the well-known “Bwana Sukari” (Mr Sugar) brand. Partners to this significant success story are around 9 600 small -scale growers who annually supply around 630 000 tons of cane, which together with 650 000 tons of cane produced by Kilombero’s own cane estates, meets the 1.28 million tons of cane processed by the plant’s two sugar factories.
Now with the significant expansion project at Kilombero nearing completion, both these partners together with around 8 000 new growers are gearing up to sustainably supply a massive 1.5 million tons of cane per annum. Together with increased cane produced by the estate itself of up to 1 million tons, annual sugar production is expected to double to 271 000 tons with the additional sugar of around 140 000 tons produced by the new, state of the art sugar mill currently under construction.
Pierre Redinger, Kilombero’s Grower Agricultural Head and his support team have spent much time since the expansion was announced engaging with local existing and new growers to transfer critical agricultural, business, financial and other skills.
Abdulkaid, a councillor for Kidodi Ward, is one of many new growers who will be supplying cane to the new expanded Kilombero factory. Here he meets Paul Kenward, CEO of ABF Sugar at a recent and well attended local growers’ day.
This project is in alignment with Tanzania’s government policy to achieve self-sufficiency in sugar production by 2025 and represents one of the biggest capital investments ever within in the African cane sugar industry.
Currently, the growers’ sugar cane is sourced via a formal Cane Supply Agreement which is a revenue-sharing agreement and ensures growers receive payments based on sugar and molasses sales, which in turn are also influenced by prevailing market conditions. These community growers in the Kilombero Valley are represented by 17 geographically located Agricultural Marketing Co-operative Societies, called “AMCOS”.
Purchases by Kilombero Sugar from these growers in the Valley has soared from 140 000 tons in 1998 to a record 666 012 tons in the 2022 season - remarkably, these growers collectively earned around TZS 70 billion for their deliveries, only to increase their earnings to TZS 75 billion a year later, benefiting from the highest price paid per ton of sugar to growers across Tanzania’s sugar industry in 2023. While growers independently manage their own agricultural activities, including planting and harvesting, they are also closely monitored by the regulator of the sugar industry – the Sugar Board of Tanzania (SBT) and the Tanzania Cooperative Development Commission (TCDC).
For its part, our agricultural team at Kilombero actively supports the capacity building of AMCOS and growers by facilitating collaboration with key stakeholders offering education and financial services. Institutions such as the Tanzania Agricultural Research Institute (TARI), particularly the Sugar Research Institute (SRI), work closely with these growers and the Financial Sector Deepening Trust (FSDT) in building capacity on Governance and financial literacy.
Pierre Redinger (far left) with his grower support managers. Collectively, they have a huge task at hand helping growers to cultivate and supply cane to the new factory.
Kilombero also offers on the ground support through its Growers’ Agriculture Department, now equipped with 7 Grower Support Managers to assist 21 Grower Support Officers in the various geographical zones, a Grower Optimisation Manager, a Geographic Information System specialist and a Community Relations support function.
Whilst the past season’s heavy rains across the country have caused loss of life and major infrastructural damage over wide areas in Tanzania, the wet weather has also wreaked havoc on cane production in the Kilombero valley affecting grower, company agricultural and factory operations. It will take time for the region to recover but there is no doubt that the commissioning of the new expansion project in 2025 is already fuelling renewed hope in the area which over the longer term, is expected to benefit meaningfully from the positive socio-economic development impacts derived from Kilombero’s ambitious growth plans.