All is not well at Kakira Sugar Works as management there has warned in a letter that it intends to lay off over 4,000 employees as a result of the factory’s failure to break even financially due to stiff competition from new entrants in the area.
The letter dated October 16, 2017, addressed to the Secretary General of National Union of Plantation and Agricultural Workers (NUPAW-U) Joram B.Pajobo, requesting him for a meeting to discuss the impending lay off of the workers, says: “We are writing to request for a meeting with you to discuss our current plight of failing to break even financially in our operations and resulting inevitability to lay off not less than 4,000 employee.”
The managers at one of the country’s biggest sugar manufacturers want to meet Mr Pajobo on October 26 at their head offices at Kakira to discuss the issue that if the solution is not sought, it will impact negatively the families of the over 4000 employees. Mr Pajobo is also Member of Parliament representing Workers.
The managers at the factory in a letter blame their economic losses on what they referred to as the rampant licensing of new sugar factories in the area it operates, saying this has been done in disregard of the sugar zoning policy. “The sugar policy was approved by the Cabinet in August 2010 and has still not been enacted into an Act,” the letter reads in part.
They say the delay in in acting on the sugar Act has compounded the challenges faced by the sugar industry in general.
They are irked by the fact that new sugar factories have installed large capacities despite not having their own nucleus estate. “This has inevitably created a huge shortage of sugarcane and has compelled us to crush immature cane,” the letter continues, adding that this has resulted in both the company and farmers making loss.
The letter further says the company now operates at 50 per cent capacity due to lack of enough sugar cane to crush, forcing it to lay almost half of its labourers.
Kakira Sugar Works has always attacked Mayuge Sugar Industries for encroaching its sugarcane out growers and land ownership.
In the letter, the company says it paid taxes worth Shs100 billion in 2016 despite not operating at full capacity. “If we were operating at full capacity in our own zone, we would be paying in excess of Shs240 billion in taxes to government,” they say in their letter.
The sugar policy recommends that sugar factories are established within a radius of at least 50 kilometers from one another. But according to Uganda Sugar Manufacturer’s Association, the industry has not been well regulated leading to collusion and distortion of the out grower systems on which old factories have survived for sugar cane.
Management at the company say they intend to inform relevant authorities about the impending sacking of the employees, majority of who are casual workers, among other challenges cited.