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.