Uganda Buys Stake in New Sugar Company in Former Rebel Region

(Bloomberg) -- Uganda acquired a 32 percent stake in Atiak Sugar Factory in a northern region that’s recovering from two decades of war by the Lord’s Resistance Army, the Trade Ministry said.

The state spent 64.8 billion shillings ($17.4 million) on the stake that will be held by the Uganda Development Corp. It bought the interest from Horyal Holdings Ltd., which is developing the plant near the border with South Sudan, the ministry said in a statement in the New Vision newspaper.

The greenfield project will have capacity to crush 1,650 metric tons of cane per day and to generate 6 megawatts. In future, the capacity will be raised to 3,500 tons and 27 megawatts, according to India-based Sugar Power Projects Private Ltd., consultants for the project.

Northern Uganda bore the brunt of the violence led by Joseph Kony until 2005 when the insurgents were driven out and now operate in the Central African Republic.

Uganda has 11 operational sugar plants out of 27 licenses, according to the ministry. Combined output of the sweetener may climb 17 percent to 428,000 metric tons this year, according to the Uganda Sugar Manufacturers Association.

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, Jacqueline Mackenzie

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