Skip to main content

SOROTI FRUIT FACTORY, A POTENTIAL GAME CHANGER FOR EASTERN UGANDA


On the weekend President Yoweri Museveni commissioned the Soroti Fruit Factory, which promises to change the fortunes of fruit farmers in the Teso region.

"According to reports, the factory can process 129,000 tons of fruit annually or the equivalent of 3,225 trailer loads of fruit. There are 8.2 million fruit trees in the region, if each tree produces 80kg, the 656,000 tonnes resultant production will be more than sufficient to keep the factory running well into the future. Upgrades of the plant’s capacity is foreseeable very soon....

The factory’s products – packed juices, are to be sold locally and to the region.

The Teso Tropical Fruit Farmers’ Co-operative has complained that they have been receiving sh200 a kg for their produce but have seen a doubling of the price to sh500 a kg by the factory. The cooperative is a 20 percent partner in the enterprise. Government through Uganda Development Corporation (UDC) owns the remainder.

The factory is a $10.2mln investment done by South Korea and Uganda.

This single investment has got the potential to be a game changer in the Teso region and even further afield, if managed well.

The challenge for most farmers and the rural areas in particular is the lack of, quality inputs, knowledge of modern agricultural practices, to not only increase productivity but minimize post-harvest losses and access to markets.

I would like to believe that the promoters of the factory have already helped the farmers plant he appropriate varieties of fruit to supply the factory. Not any kind of orange or mango can produce the juice required to make the venture profitable and sustainable. So while there maybe millions of fruit trees in Teso their fruit may not be of the kind that the factory requires.

I read that 120 trees can be fitted on an acre. Is this the optimal number of trees? Is the spacing correct? With the addition of fertilizer can we get more trees on the land or push productivity higher than current estimates? How about pest control? How do we harvest the fruit and handle it to ensure that we not only minimize postharvest losses but also ensure that the quality delivered to the factory is top notch?

And finally the market. I saw that the initial juice will be sold in 200 ml pouches at sh1,500 each. Immediately I know that the target market will not be the rural areas but may compete favorably on the shelves of Kampala and other urban areas. I imagine with greater economies of scale they may bring down these prices.

Nevertheless, the processing and packaging lengthens the juice’s shelf life, meaning it can be transported much further afield than were it only fresh juice. Assuming a cost of production of sh750, factoring in distribution and marketing it’s hard to see how that juice can cost a dollar – about sh3,800 in any of its target markets.

"It is easy to think that there is an obvious market for juice, but there is a lot of competition from local, regional and international companies. The company’s marketing department will need to be very sharp to make inroads in the market. Just because the juice is locally produced is not enough of an incentive for people to take it up....

Building the factory is commendable and government should be lauded for it. But the factory is not the business.

The business may include providing extension services to the farmers, managing supply, production, marketing and distribution. Any part of this value chain can fail the whole enterprise. Which would be a crying shame.

It should not be allowed to fail, if only because it can encourage production in the Teso area, but it must be run on sound commercial principles so that the help it gives the fruit farmers can be sustained well into the future regardless of the circumstances.

And if it succeeds it could serve as useful pilot for other similar enterprises around the country.

We are poor because we have been unable to unlock the vast potential of our assets – the land and our people. Adding value to our produce will bring us one step closer to unlocking our incredible potential as a country.

Good luck Soroti Fruit Factory.







Labels:

Comments

Post a Comment

Popular posts from this blog

SPORTS AS AN ANALOGY FOR BUSINESS

Like everybody else I know, my spirit was lifted by the success of our athletes at the World Athletics Championships last week. The diminutive Halima Nakaayi showed the heart of a lion, sprinting over the last 100m of the women’s 800m event to snatch victory from a more favoured American runner. It was so uplifting to watch. Subsequent stories about the challenges she has had to overcome to get where she is now were testament to the determination of the woman. Joshua Cheptegei’s victory, while no less inspiring, had a different quality to it. Cheptegei was the man to watch going into the event. He won previously at the Commonwealth Games last year and the in the just concluded Golden League. He was a silver medalist in the 10,000m at the last World Championships in London, pipped to the tape by the now retired Mo Farah. Cheptgei still had to battle the Kenyans and the Ethiopians all the way. But as a favourite he lived up to expectations, which sometimes is more diffic...
Post a Comment
Read more

WE NEED FASTER TURN AROUND ON OUR ROAD PROJECTS

During a recent trip to China I was shocked to find properly paved roads and first class infrastructure deep in the countryside, hundreds of kilometres away from the capital, Beijing. I rode the high-speed railway out of Beijing, doing more than 300 kilometres per hour and I can attest I have never been on anything like it anywhere in the world. Not in Europe. Not in the States. Nowhere. I was blown away and wondered why we can’t at least do a tenth of this at home. I have to say I was pleasantly surprised when I used the Entebbe Expressway from the airport. I was in Kampala in under an hour. The Entebbe road had become a nightmare. I was shaken out of my good feeling when I had to make a trip to Tororo the other day. On my way back I spent two and half hours between Mukono and Kampala, about the same time it took me from Tororo up to Mukono. Clearly there is a lot of work to be done on our transport infrastructure. The full extent we probably don’t appreciate,...
Post a Comment
Read more

CONGRATULATIONS ON YOUR GRADUATION, ITS NOW TIME TO WORK….

Thousands of students will be graduating from their respective universities in coming days and months. Makerere, our country’s oldest university will kick off its ceremonies on January 15th and the other universities will follow. The graduates have already had a taste of the real life, having finished their studies mid last year and tried to get employed. Many know by now that the world can be harsh and unforgiving. I hope many are tightening their belts in readiness for the struggle ahead. Some may have decided to kick the tin down the road by continuing with school. And others may have given up altogether. My prayer is that there are more of the first and less of the last kind. In talking to young people, I find that what is needed is a reorientation of their minds – a mindset change. Let me share with you certain facts to help manage their expectations of the world and how they can fulfil their potential in our context. First of all, the world owes you ...
Post a Comment
Read more

ARE WE HELPLESS TO DO ANYTHING ABOUT THE CARNAGE ON OUR ROADS?

Recently there was a horrific crash between a passenger bus and sand laden Isuzu truck on the Masaka-Kampala highway. To look at the pictures of the aftermath it is a miracle that only two were killed and 20 injured in the accident, which it is reported was a head-on collision between the two vehicles. We don’t go a week without news of a major accident on our trunk roads. I suspect that a combination of poorly maintained vehicles, improperly trained or inexperienced drivers, driving at break neck speeds are to blame. "A few months ago, there was a suggestion that the new paved roads were not properly designed and therefore causing the accidents, but I think that is a case of poor workmen blaming their tools.... If one was to buy this argument, what about the argument that we had fewer accidents when our roads were pot holed and it would take whole days travelling journeys that now take a few hours? So, we should we go back to our potholed roads? "Accord...
Post a Comment
Read more

THE KEYS TO OUR HEALTH ARE WITHIN OUR REACH

I prefer to speak about business. But it is obvious to me as it should be to everybody, that the fruits of business can’t be enjoyed without good health. As we progress in age we need to take care of our health more than before, focus on prevention because our bodies can no longer bounce back from illness as fast as they used to. The other day I happened upon a Facebook video from Dr Luke Coutinho, an Indian doctor who treats cancer patients. He made a wonderful video that moved me -- “Four things people with cancer have in common.” Look it up. Coutinho, in the video said that when he looked at the data from hundreds of patients, from all over the world, that had been treated at his facility he found four commonalities. The first one he said was chronic constipation. He explained that constipation, infrequent bowel movement, means the body is retaining toxins that should not be there. These toxins then find their way back into our bodies and provide the environment fo...
Post a Comment
Read more

UMEME A RECOGNISED SUCCESS BUT …

  Recently the World Bank did a survey of the power utilities on the continent. Of the 39 utilities surveyed only two, in Uganda – Umeme and in Seychelles, were able to cover their operating costs and capital expenditures – maintenance and expansion of the grid. The report went on to point out that only 19 or about half of the surveyed utilities were able to meet their everyday costs like salaries. Essentially most of our power utilities on the continent are technically bankrupt. This has far reaching ramifications for the industry as a whole. When you, the client, pays your bill, Umeme then passes money up the line to pay the transmission and generation companies. If Umeme does not collect the revenues due to it or does not price the power at an appropriate rate, the pain will be felt up and down the sector. The transmission company would not be able to maintain and extend its network and the generation company would not be able to generate efficiently or build ...
Post a Comment
Read more

NOT ONLY THE HARDWARE BUT THE SOFTWARE TOO

In the middle of September the United Nations released its annual Human Development Indicator (HDI). This index serves as an indicator of the quality of life of a country’s people by measuring the health, education, inequality, poverty and security standards. Aside from the statistical measures of development like GDP growth, this is obviously a better measure of how people are actually doing. In this year’s HDI report Uganda was ranked 162 out of 189 countries with a HDI score of 0.516. The index goes from zero to one, the nearer you are to one the better. Our score puts us in the low human development category. But as bad as that sounds we have been worse. In 1990, the earliest year that these figures were compiled our score was 0.311 even the UN recognises that we have improved 66 percent in the last three decades. According to the UN figures life expectancy has risen to 60.2 years   from 45.5 in 1990; expected years of schooling has doubled to 11.6 fr...
Post a Comment
Read more