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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
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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
KENYAN SUGAR INDUSTRY (At a Glance) Number of growers >250,000 Number of mills 11 Average capacity (TCD) 3,000 Area under cane (Ha) 213,710
KENYAN SUGAR INDUSTRY (At a Glance) Cane yield (t/ha) 51.67 Cane Delivered (MT) 5,822,633 TC/TS 10.23 Sugar Produced(MT) 493,937
FACTORY CAPACITIESInstalled, Current & Proposed Capacities • Move table here
JAGGERY OPERATORS • Lubao Jaggery • Shajanand Ltd. • Homalime Co. • Farm Industries Ltd • Over 300 informal including mobile jaggeries. • Total cane crushed: 1.45 Million tonnes
SUGAR CANE SUPPLY • 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.
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 agro-ecological zones, aimed at improving soil fertility. • We have also embarked on a cane development program that will ensure adequate cane supply to all factories
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.
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.
CHALLENGES FACING THE INDUSTRY • High cost of production Cost of Sugar Production in COMESA and Selected EAC countries
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
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
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
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
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.
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.