INVESTORS IN EASTERN REGION PROSPER DESPITE COVID-19
By David Muwanga
Uganda Investment Authority (UIA), is mandated to, among others, provide aftercare services to investors which extends to policy advocacy and investment monitoring. In fulfilling that mandate, the Authority dispatched a team of officials from the Investment Promotion division and Aftercare services to the Eastern region.
“COVID-19 has generally impacted the way people are doing business today. It was important that we went to this region to find out, from the investors, what the impact has on the progress of investment projects in the region has been,” said Ms. Prossie Kikabi, Senior Investment Executive, Investment Promotion and Development.
With this in mind, the team set out to visit and interview with investors who included, National Cement Company Uganda Limited, the manufacturers of Simba Cement, Tororo Cement Limited. Novo Enterprises, Busia Sugar and Allied Limited, Wagagai Gold Mines, Tororo PV Power Company and manager of SINO-Uganda Industrial Park.
In an interview Mr. Kanti Mepani, a Director at the National Cement Company Uganda Limited, told the team that the company had largely not been affected by the pandemic.
“The company’s turnover is 2500 tons per month and we are investing a total of $200 million to start production of Iron Ore and expanding the plant at a cost of $40m,” he told the delegation.
Mr. Kanti Mepani (Second left) with UIA at the Cement factory in Tororo.
New investors such as Novo Enterprises are also investing $7 million to start manufacturing 300,000 cement bags per day in the region- giving credence to the fact that there are opportunities for growth in the construction sector.
“We plan to double our production in the next five years to 600,000 bags per day creating 300 jobs in the next five years,” said Nishel Doshi, a company official.
Mr. Nishel Doshi (Extreme right) with UIA officials at the site where the factory is being constructed to manufacture cement bags
The delegation also learned from Mr. B.M Gagrani, the Executive Director of Tororo Cement Limited, that the company had installed new machinery with updated technology.
“As a result, we have increased production from 20,000 tons per month to 200,000 tons per month, currently we are the market leaders with a 60 percent share, employing over 1500 people,”.
He said the major challenge is the intermittent power supply which affects production. “We are suffering a lot with power shortages due to an old transformer, sometimes the power is so high and burns our equipment, and this has reduced our capacity from 3 metric tons to between 2.2-2.3 metric tons per month”.
Mr. Gagrani added that COVID-19, though a pandemic, was a blessing in disguise.
“We increased our sales during the period since parents were not paying schools fees. They concentrated on construction, our capacity grew to between 200,000-260,000 metric tons per month, so with COVID-19, I can’t say we had a problem,”.
Mr. Gagrani in a meeting with UIA at Tororo
He said the company’s next project is to construct a clinker plant in Moroto.
“We have spent $600,000 for prospecting and this has been completed, and we are planning to invest between $200-$250 million”.
He criticized politicians in Moroto for discouraging local people from selling land to the company.
“When the politicians come to know that you are expanding and want more land, they also come up expressing interest in the same land and discouraging locals from selling land to the company.”
Mr. Dong Wang, a director at Wagagai Gold Mines in Busia also decried power shortage in the area.
“We have invested a total of over $30 million and employing 300 people but we are relying on a generator,” he said. The company is still carrying out more explorations.
Mr. Wang showing UIA officials the piles of minerals in which they have to extract gold. They are in store due to the closure of the Tanzania and Namanve plants
“The other challenge is that we used to crash our raw materials in Tanzania and Kampala Industrial and Business Park (KIBP), Namanve to extract gold but all are closed due to COVID-19,” Mr. Wang said.
Mr. Martin Onyango, the Production Manager of Busia Sugar and Allied Limited, also said that they benefitted from the COVID-19 outbreak because it resulted in increased sales of Ethanol that is used to manufacture sanitizers.
Mr. Onyango in short sleeved shirt and other officers at the Sugar and Allied Limited plant
“We wanted to expand into manufacturing sanitizers but the long process of certification by the Uganda National Bureau of Standards (UNBS) discouraged us,” he explained. “In the next three years we are diversifying into sugar and fertilizer production at an estimated cost of $5 million”.
While at Tororo PV Power Company, a company generating 50MW of solar power, the delegation met with a Director, Mr. Madhushan Horanapathirona, who advised that the company is to double their production with construction of two or three solar power plants in the next three years.
Mr. Horanapathirona in a meeting with UIA officials in Tororo.
Mr. Marcus Ma, the manager of SINO-Uganda Industrial Park in Mbale revealed that there 13 projects, six of which are operational while seven are under construction all employing 900 people.
UIA Officials with Mr. Marcus Ma at Mbale
“In the next three years, we are targeting more 13 investors into the park and our target is to create 15,000 jobs,”.
The UIA team was comprised of Prossie Kikabi, Senior Investment Executive, Investment Promotion and Development, Mark Wagubala, Investment Executive, Investment Promotion and Development, David Muwanga, Investment Executive/Public Relations and Peter Matovu.