NAIROBI, Kenya Jul 2 – Players in the sugar sub sector are being urged to diversify their products if they are to remain competitive against other millers in the Common Market for East and Southern Africa (COMESA) region.
Kenya Sugar Board Director Billy Wanjala said on Friday the move was necessary as millers brace themselves for the end of COMESA safeguards on the importation of sugar in 2012.
A deal struck by member states of COMESA currently restricts sugar imports from the region to 200,000 metric tonnes per year in an effort to protect the industry.
Mr Wanjala said Kenya currently has a 230,000 metric tonne deficit in sugar, which would be exposed if farmers and millers did not implement reforms that make Kenya competitive.
“This trend is unsustainable for us as an industry and it’s for this reason that our long term objective is to transform the industry into a multi-product sugar industry that is efficient, diversified and competitive,” Mr Wanjala said.
Kenya currently has eight operational mills with a combined capacity of 25,490 TCD (tonnes crushing per day) producing 520,000 metric tonnes of sugar for against a current demand of 750,000 metric tonnes annually.
He said there was need for sugar millers to extract more from sugar cane arguing there are more than 20 products that can be extracted but currently millers only concentrate on sugar and molasses.
“The sugar factories in the South American have diversified and produce more than 20 products from cane ranging from ethanol, spirits wax to electricity,” Mr Wanjala said.
He however said technology was key to any growth in the sugar sub-sector calling on millers to invest in it to boost production.
“Technology provides avenues of improving efficiency and improving productivity ultimately brining down the cost of production and higher returns for farmers,” he said.
The Kenya Sugar Board is looking to open four new sugar factories by 2012 to help with the crushing and processing of cane that has seen renewed interest.
There has been increased demand for sugar with cane farmers expected to produce close to 8.1 million tonnes between 2009/2010.
Kenyans are forecast to consume about 6.3 million tonnes this year.