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Atiak sugar factory faces double trouble: Fire hazards and infrastructure delays

Atiak sugar factory

Atiak sugar factory

Fire outbreaks, delays in government procurement of machinery, the construction of the Aswa bridge, and ongoing financial distress are adversely affecting the operations of Atiak Sugar Factory, according to information obtained by The Observer.

Situated 17 km from the Gulu–Nimule road in Amuru district, Atiak Sugar Factory is a subsidiary of Horyal Investments Holding Company Limited. The factory was commissioned in October 2020 and has an annual production capacity of 66,000 tonnes.

The company has been financially strained since the closure of Crane bank in 2017, one of its key creditors. After the bank was sold to Dfcu, the company couldn’t restructure its debt until the Ugandan government stepped in as an equity partner. In May 2018, the government, through the Uganda Development Corporation (UDC), acquired 10.1% of shares worth Shs 20 billion to help complete the factory.

In July of the same year, an additional Shs 45 billion was invested, raising the govern- ment’s stake to 32%. By April 2019, the company requested another Shs 24 billion from the government for the construction of staff houses and offices, which increased the government’s share to 40%.

Mohamud Ahmed, the director of Planning and Business department at Atiak Sugar Factory, stated that the first capital injection comprised ordinary shares. The government has spent a total of Shs 80 billion through UDC, securing them 40% ownership in the company. Ahmed clarified that no additional resources from UDC were needed to complete the factory; rather, extra funds were allocated for sustainability measures, such as irrigation and housing for workers.

Despite the capital investments, the company has been criticized by several legislators for failing to produce sugar. They have called for an audit to scrutinize the funds invested in the company. As for equipment, the government allocated Shs 108 billion in 2022 for the purchase of agricultural mechanization tools under a finance lease arrangement.

Benson Ongom, director of Corporate Affairs and Public Relations at Atiak Sugar, stated that they have received 48% of the equipment from UDC, which includes graders, wheel loaders, excavators, chop harvesters, track sprayers, and seeding machines.

“We expect to receive the rest of the equipment by January. However, we aim to have sufficient machinery by the end of November to commence logistical work and planting activities,” Ongom said.

In 2019, President Museveni commissioned the upgrade of the Bibia-Nyimur road and the construction of the Aswa bridge over River Aswa. The infrastructure was meant to facilitate the transportation of sugarcane from Lamwo district to Atiak Sugar Factory.

However, The Observer’s visit to the site revealed that construction of both the road and the bridge has not yet commenced, despite funds being released to contractors in October 2020. A 30% advance payment has already been made, but no progress is evident on the ground.
Sobetra Otada Joint Venture, the company contracted to build the bridge, briefly set up temporary structures before abandoning the site.

The undisclosed company tasked with upgrading the road has yet to appear. When questioned, Allan Sempebwa, spokesperson for the Uganda National Roads Authority (UNRA), stated that the bridge had been completed long ago but promised to double-check the information.

Horyal Investments Holding Company Limited established a 15,000-acre farm in Lamwo district, 5,240 acres of which have been cultivated.

“It’s crucial for the government to inform us about delays, especially when public funds are involved,” said Mohamud Ahmed.

The stalled projects have led to financial losses for farmers, who now must travel 280 kilometers instead of 52 kilometers to deliver their produce. In December 2021, a fire destroyed 1,900 hectares of the sugarcane plantation, resulting in a Shs 19.1 billion loss and disrupting production.

Since then, 350 hectares have been revived for use. Bunty Seeruttun, the director of Agriculture, noted that fires often start during the dry season for various cultural and situational reasons. Fire prevention is a key focus moving forward, with four fire trucks and fire lines established around the plantation.

Despite a slow start due to limited sugarcane availability, Mohamud Ahmed emphasized that the factory has an original capacity of 3,500 tonnes per day, requiring 140 acres of sugarcane. Currently, production is limited to 50kg and 25kg bags primarily sold to Kenya, South Sudan, and within the sub-region.

The company aims to resume full-scale production by late 2024 and has decided not to sell its products in Kampala due to high transport costs.

“In the sugar industry, we agree on sugarcane and sugar prices annually. The biggest variable affecting our prices is transportation,” Mohamud concluded.


0 #1 Akot 2023-09-20 13:56
Without NO to the tribalistic system & UNITY,
Museveni is assured of 40 years, will be legalised with next fake presidential, parliamentary, local elections to ensure his 45 yeas in power! So things will only get worse for Atiak & all other areas!

Africa is rich land, yet the people are so poor & migrating to developed lands that pay African countries to get; food, oil, gas...that rulers, tribal leaders, ministers, mps, live so well with, while ignoring +60% poor population, reason the educated, the young are migrating to Europe!

Thank God France said NO to taking in Africans waiting in Italy, knowing more & more will come!

The rest of European States should do the same, especially now they have enough Africans helping them refurbish roads, houses, clean sewages/roads...!
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-1 #2 kasede 2023-09-21 10:27
(1) WE LAY OUR FUTURE IN IOUR OWN HANDS. Therefore, those EU donors are doing us a favour. We are not PETS to fed as they have been doing for years since this regime came to power.

(2) Such projects are there for swindling donors and the national treasury, Therefore, if that sugar will ever be produced, per Kg price wil not be affordable by Ugandans.

We have seen that with hydo-electric power projects & others. (3) The Late Gwok predicted here that ( .... "the bAcholi will be sugar cane cutters on their land ..."), which would be a fiting outcome for collaboration in bring M7 to power. I say "Best wishes to the future Atiak Sugar Cane Cutters Association". Amen
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0 #3 Lakwena 2023-09-21 10:28
The Atiak Sugar Factory nightmares starts with the covetous, ill and dubious motivation of concealed land-grabbing.

Secondly, the problem also has to do with lack of extended feasibility study. E.g., that firebreaks during dry season has to do with cultural practices; is sear superstition.

Just like the recent Wild-fire-outbreaks in the Mediterranean Regions and North America, not forgetting Hawaii; are of natural causes (heat-wave triggered bio-gas); most of the fire-outbreaks in Greater Northern Uganda during prolonged dry seasons are also naturally caused: due to the accumulation of bio-gas from rotting grass and/or vegetation, during wet season.
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0 #4 Lakwena 2023-09-21 10:33
E.g., I recall as a child, in the January-February dry and blistering afternoon heat, with my naked eyes, from, nowhere I saw our grandmother's grass-thatched roof hut, where no cooking took place burst into flames.

In other words, where ignorance about natural process/phenomena was and still is in abundance, it was attributed to being bewitched sic witchcraft.

Therefore, apart from sabotage owed to some people whose ancestral land had been grabbed; one can only imagine the tinder from the volume of decomposing Sugarcane leaves (compost) during dry dry season.

Wachireba basiiru.
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