Uganda Top Sugar Makers Urge State to Reconsider Miller Zoning

(Bloomberg) -- Uganda’s top three sugar producers urged the government to reconsider parliament’s rejection of zoning for millers, saying it would undermine output due to competition for cane.

Allowing producers to establish mills within 25 kilometers (15 miles) of each other will lead to competition and cause producers to operate below capacity, Jim Kabeho, chairman of the Uganda Sugar Manufacturers Association, said Wednesday by phone from Jinja, in eastern Uganda.

“We asked for zoning and we didn’t get it,” he said. “We are now waiting to hear from government because we are already losing on production.”

At least nine factories were established in the past decade, some too close to other plants, according to the lobby that groups Kakira Sugar Ltd., Kinyara Sugar Ltd., and Sugar Corp. of Uganda Ltd.

Lawmakers in the East African country last year rejected demands for zoning, saying it would force the government to move millers or to buy land. Under Ugandan law, the president can either sign the bill or ask the lawmakers to review legislation they’ve enacted.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Helen Nyambura, Hilton Shone

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