Overview of the sugar industry

Report
ADAPT IT SMART SUMMIT
DURBAN
KENYA SUGAR INDUSTRY PROFILE
Presented by Francis K. Ingara
Engineering Department
KENYA SUGAR BOARD
ISO 9001: 2008 Certified
OUTLINE
 Kenyan Sugar Industry – at a glance
 Industry Performance
 New Projects
 Milestones
 Challenges
 Required interventions
ISO 9001:2008 Certified
KENYAN SUGAR INDUSTRY
(At a Glance)
Number of growers
Number of mills
Average capacity (TCD)
Area under cane (Ha)
>250,000
11
3,000
213,710
ISO 9001:2008 Certified
KENYAN SUGAR INDUSTRY
(At a Glance)
Cane yield (t/ha)
Cane Delivered (MT)
TC/TS
Sugar Produced(MT)
51.67
5,822,633
10.23
493,937
ISO 9001:2008 Certified
FACTORY CAPACITIES
Installed, Current & Proposed Capacities
Factory
Nyando
Chemelil
Muhoroni
Soin
Original Capacity
(TCD)
Current Capacity
(TCD)
Proposed Expansion
(TCD)
800
800
500
3,360
2,200
100
4,200
6,500
600
800
1,650
3,000
Sub-Total Nyando
Sugar Belt
Mumias
2,900
7,310
14,300
1,250
9,200
9,600
Nzoia
West Kenya
Butali
Sub-Total Western
Sugar Belt
SonySugar
2,000
2500
3,360
3,000
7,000
4,500
1,000
1,250
1,500
6,750
2,160
16,810
3,120
22,600
6,500
Transmara
Sukari
Sub-Total Sony
1,250
1,500
4,910
1,250
1,500
5,870
2,500
2,500
11,500
14,560
29,990
48,400
Kibos & Allied
Total
 Move table here
ISO 9001:2008 Certified
JAGGERY OPERATORS
 Lubao Jaggery
 Shajanand Ltd.
 Homalime Co.
 Farm Industries Ltd
 Over 300 informal including mobile jaggeries.
 Total cane crushed: 1.45 Million tonnes
ISO 9001:2008 Certified
KENYAN SUGAR INDUSTRY
(At a Glance)
TREND IN CANE DELIVERIES (TC)
7000000
6000000
5000000
4000000
TC
Cane…
3000000
2000000
1000000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Years
ISO 9001:2008 Certified
AREA UNDER CANE: OUTGROWER VS
NUCLEUS
8
250,000
200,000
150,000
NUCLEUS
ESTATE
MT
graph
100,000
50,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
YEARS
ISO 9001:2008 Certified
SUGAR CANE SUPPLY
9
 90% of cane supply to the factories is from
contracted cane farmers, while 10% is from the
respective factory the nucleus estates.
 The area under cane has gradually risen over the past
10 years by 74% to reach 213,710 Ha in 2012.
ISO 9001:2008 Certified
AVERAGE YIELD TREND
80
70
60
MT
50
Yields (TC/Ha)
40
30
20
10
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
YEARS
ISO 9001:2008 Certified
CANE YIELD
 The cane yields have been declining owing to
continuous land use. The high cane demand has
also led to occasional harvest of younger cane,
reducing the yield.
 To mitigate this, we are currently undertaking
research on soil management in the various agroecological zones, aimed at improving soil fertility.
 We have also embarked on a cane development
program that will ensure adequate cane supply to
all factories
ISO 9001:2008 Certified
SUGAR PRODUCED
SUGAR PRODCUTION TREND (MT)
600000
500000
400000
MT
Sugar…
300000
200000
100000
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
YEARS
ISO 9001:2008 Certified
PRODUCTION & CONSUMPTION
TRENDS
ISO 9001:2008 Certified
TOTAL PRODUCTION, CONSUMPTION
AND IMPORT
14
SUGAR PRODUCTION, CONSUMPTION AND IMPORTS 20032012
900,000
800,000
700,000
600,000
MT
500,000
400,000
300,000
200,000
100,000
0
2003
2004
2005
2006
2007
YEARS
2008
2009
2010
2011
2012
PRODCUTION
CONSUMPTION
IMPORTS
ISO 9001:2008 Certified
MILESTONES
ISO 9001:2008 Certified
MILESTONES
1. Co-generation
 The industry has potential to generate up to 190
MW of electricity from this source, which is
currently under-exploited.
 Currently, only Mumias Sugar Company
produces electricity for commercial use, having
installed modern power generation equipment at
a feed in tariff of 10 US cents per mw.
 The rest of the factories produce at a lower scale
for consumption by the respective factories.
ISO 9001:2008 Certified
MILESTONES
2. Ethanol Production
 The National Bio-fuel Policy has been developed,
which allows for 10% blending of ethanol with
petrol.

Mumias has already developed an ethanol plant,
currently being commissioned.
ISO 9001:2008 Certified
Factory
Annual T.C
Molasses t.p.a
pEthanol (L) p.a
Mumias
2,400,000
70,000
17,500,000
Nzoia
900,000
27,000
6,750,000
SonySugar
750,000
22,500
5,625,000
West Kenya
750,000
22,500
5,625,000
Chemelil
900,000
27,000
6,750,000
Muhoroni
540,000
16,200
4,050,000
Kibos & Allied
450,000
13,500
3,375,000
Sukari Industries
420,000
12,600
3,150,000
Butali
350,000
10,500
2,625,000
Transmara
350,000
10,500
2,625,000
TOTALS
7,810,000
232,300
58,075,000
ISO
9001:2008 Certified
CHALLENGES
ISO 9001:2008 Certified
CHALLENGES FACING THE
INDUSTRY

High cost of production
Cost of Sugar Production in COMESA and Selected EAC countries
Country
Kenya
Sudan
Egypt
Swaziland
Zambia
Malawi
Uganda
Tanzania
Cost USD/ tonne
>500
250-340
250-300
250-300
230-260
200-230
?
?
ISO 9001:2008 Certified
CHALLENGES FACING THE
INDUSTRY
 High Cost of Inputs
 Punitive taxation regime
 Diminishing land sizes
 Reliance on rain-fed cane production
 Inadequate capital for operations, factory
rehabilitation, maintenance of infrastructure,
modernization and expansion
ISO 9001:2008 Certified
CHALLENGES FACING THE
INDUSTRY
 Weak Research and Extension linkages
 Cane Fires
 Challenging regulatory framework with slow pace
of amendment of laws and gazettement of
regulations
ISO 9001:2008 Certified
CHALLENGES FACING THE
INDUSTRY
 Changing farmer attitudes to view sugarcane
production as a business
 Motivation of farmers to produce higher quality
cane
 Reduced levels of factory efficiencies
ISO 9001:2008 Certified
REQUIRED INTERVENTIONS
ISO 9001:2008 Certified
Improved Productivity
 Introduction of cane quality monitoring processes
 Introduction of quality based cane purchase system
to motivate farmers to deliver higher sucrose
tonnages opposed to higher cane tonnages
 Improved factory performance management and
reporting for easy benchmarking
ISO 9001:2008 Certified
Pilot Cane Testing Project at Nzoia Sugar
 The project scope includes the construction and
equiping of a laboratory with cane sampling and
testing equipment, installation of a cane payment
IMS for capturing data from the weighbridge, cane
testing laboratory and compilation of growers cane
proceeds on the basis of the current legal cane
payment fomula.
 Installation was through a turn-key project in
which Bosch and Adapt IT were responsible for all
project delivery activities.
ISO 9001:2008 Certified
Pilot Cane Testing Project at Nzoia Sugar
ISO 9001:2008 Certified
Pilot Cane Testing Project at Nzoia Sugar
ISO 9001:2008 Certified
Pilot Cane Testing Project at Nzoia Sugar
ISO 9001:2008 Certified
Pilot Cane Testing Project at Nzoia Sugar
 Project installation delivered successfully last
December to KSB
 Kenya Sugar Research Foundation is currently
undertaking trials on the economic feasibility of
changing the countries cane payment system from
that based on weight to one based on quality.
 To date over 1170 samples have been tested in the
research phase of the project.
ISO 9001:2008 Certified
THANK YOU
ISO 9001:2008 Certified

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