NAADS and UDC engage stakeholders and prospective investors on establishment of Fruit Factory in Greater Masaka sub region
Government to invest Sh.40bn in the factory through NAADS and UDC
The government through NAADS and UDC is in the process of establishing a fruit processing facility in Greater Masaka sub-region. The proposed 5 MT/hr factory is one of the initiatives to promote agro-industrialization – one of the 18 programmes being implemented under National Development Plan 111 (NDP III) with the aspiration to achieve increased commercialization and competitiveness of agricultural production and agro-processing.
Attainment of this will be through the development of selected agro-based industries that target specific commodity value chains. The planned industries are guided by the Area-Based Commodity Cluster (ABCC) strategy where a given commodity cluster consists of commodities that exhibit complementarities and synergies in agro-ecological conditions, socioeconomic characteristics and physical infrastructure investment needs.
Greater Masaka sub-region was identified as one of the 4 and 10 target commodity clusters for fruits particularly pineapples and mangoes respectively. A feasibility study commissioned by NAADS in 2019 and concluded in 2020 found out that most parts in the region are endowed with conditions that are favourable for fruit growing. The major fruits grown include; pineapples, mangoes, passion fruits, jackfruit and water melon.
Masaka district is the leading producer of fruits especially pineapples, passion fruits and water melon. Mangoes especially the local variety commonly known as Kagogwa grows widely in all the districts. Masaka district is the leading pineapple producer in the sub region, and produces over 75% of the total pineapples produced in the entire sub-region; with the sub-counties of Kyanamukaka, Kyesiiga and Buwunga being the major pineapple producers. The total annual pineapple production in greater Masaka was estimated at 619,718 MT, while the total annual production of mangoes in the same sub region was estimated at 181,055 MT.
In reference to the above findings; a multi- sectoral technical working group (TWG) was set up to oversee and ensure establishment of a socially economically viable fruit factory in the greater Masaka by spearheading planning and providing technical guidance to the implementing partners. The TWG is constituted by representatives from the Office of the Vice President, NAADS, UDC, NPA, MAAIF and Masaka District Local Government.
Members of the Technical Working Group undertook a 2 days’ stakeholder engagement and field visit exercise in Masaka district to update the stakeholders on the upcoming investment project and obtain additional insight on the key facts on the ground. The team also undertook preliminary engagements with the prospective investment partners that were outlined in the feasibility study report to enlighten them on what is required to undertake an investment partnership with Government through Uganda Development Cooperation (UDC).
The team that was headed by the chairperson of the Technical working group Mr. Sunday Emmanuel from the office of the Vice President met with the political leaders and the technical management teams of Masaka district that was headed by the Resident District Commissioner (RDC) Mr. Herman Ssentongo and the Chief Administrative Officer (CAO) Mr. Nathan Lujumwa.
According to the feasibility study conducted, the proposed fruit factory will initially consume 4% per annum of the total fruit produced in the sub-region with plans for expansion. It is estimated to require a Capex of UGX 40 billion (inclusive of the initial working capital) and has a projected payback period of 5 years provided it will be well managed).
The factory will serve as an alternative offtake point for the immense fruit productivity in the sub-region not to mention the interlinked benefits that would accrue at both micro and macro-economic levels e.g. job creation, increased household income, import-substitution, increased contribution of the fruit value chain to GDP etc.
The key stakeholders in Masaka district (i.e. both public and private) have already undertaken benchmarking visits to the recently established fruit factories in Soroti, Yumbe and Kayunga; and are now more conversant with the key requirements and dynamics on how to operationalize an out-growers fruit processing facility like the one being proposed for the sub region.
NAADS focus was now shifting from the provision of agricultural inputs to supporting value addition agro-processing initiatives that would ensure offtake points for the various agricultural value chains. This would in turn encourage farmers to increase production and productivity of the various fruits as will be the case for farmers under the proposed fruit factory catchment area in the greater Masaka sub region.
UDC as an investment arm of Government has a set of guidelines and procedures that should be observed in order to ensure the establishment of an economically viable investment partnership with the private sector. The prospective investment partners that were identified by the feasibility study include Masaka Micro Finance and Development Cooperative Trust (MAMIDECOT), Mutima Beverages Bottling Company Ltd and Kyesiiga Beverages Bottling Company Ltd
Other stakeholders that participated in the meeting include Masaka Micro Finance and Development Cooperative Trust (MAMIDEC.OT), Mutima Beverages Bottling Company Ltd, Kyesiiga Beverages Bottling Company Ltd, Maddo Diaries Ltd and selected out-growers in Kyesiiga Sub county
Masaka District Local Government Authorities expressed willingness to create an enabling environment that will facilitate the establishment of a fruit factory to serve the fruit out-growers in the greater Masaka sub region while the prospective investment partners expressed willingness to join efforts under a consortium to consider the prospects of undertaking an investment partnership with Government through UDC to operationalize an economically sustainable fruit processing factory that would serve the fruit out-grower farmers in the target sub region; beginning with pineapples and mangoes.