IT may still be more than a year way, but Bidco Uganda Ltd is readying itself for the first commercial harvest of its oil palm fruits on Bugala Island in 2009.
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Plans are underway for the construction of a $10 million crude palm oil processing plant in Kalangala District. "The mill will process the crude palm oil before it is taken to the main oil refinery in Jinja for further refining into cooking oil and other downstream products," Mr. Chock Tong Sen, the manager of Wilmar Plantations Services, said recently. Wilmar is a Singaporean company and is undertaking the technical development of the oil palm project.
The mill is expected to be ready by mid 2009. The plantations are part of the Oil Palm Uganda Ltd (OPUL) project being implemented by Bidco Uganda Ltd.
The commencement of the harvest is expected to reduce Uganda's reliance on importation of edible oil that is costing the country close to $60 million million) annually. Uganda imports 80 per cent of its edible oil products from Malaysia and Singapore.
The objective of the oil palm project is to increase vegetable oil production in the country. An oil palm tree takes four years from field planting to harvesting. It can grow up to more than 30 years, but it has a gestation period of 25 years, when its economic value stops.
The oil palm trees planted in 2005 are now between 4-5 metres in height and will grow to some 10-15 metres at maturity. Depending on the age of the palm, a bunch of between 10-50 kgs of fruit can be harvested from one tree.
A total of 10,000 hectares of oil palm will be planted. Bidco Uganda will undertake the development of 6,500 hectares while the 3,500 hectares will be developed through an out-growers scheme called Kalangala Oil Palm Growers Trust (KOPGT).
Chock said a total of 3,900 hectares of nucleus plantations have already been planted with the trees. He said another 2,700 hectares are yet to be developed. "We would like to complete the project as soon as possible, but it depends on a number of factors like land," he said. "Some nucleus land that is supposed to be allocated has been encroached and some are too small for a plantation. The ideal plantation should be one big chunk of land, but the land is scattered."
Uganda's demand for vegetable cooking oil is growing as the population increases. In 2005, the national demand for edible oil was projected at 80,000 metric tonnes, up from 42,000 in 1999.
It is estimated that Uganda's edible oil consumption per capita is still a mere 3 Kgs on average, which is far lower than the standard minimum of 7.5 Kgs per capita. National production still stands at close to 25,000 metric tonnes per annum, making Uganda a net importer of edible oil.
This has provided investment opportunities into the edible oil industry. More importantly, Uganda's central location in the East and Central African region makes her a good springboard to the Common Market for East and Central Africa (COMESA), with an attractively sized and harmonised market of over 300 million people.
The major raw materials for vegetable oil production in Uganda are currently sunflower and cottonseed. A number of institutions have been created to boost production of raw material for crushing.
Kalangala Oil Palm project is part of the Ugandan Government, Vegetable Oil Development Project (VODP) initiative, a project under the ministry of Agriculture, geared at increasing vegetable oil production in Uganda. VODP is a $20 million IFAD funded project whose objectives include among others improved rural incomes through involvement of farmers in oil crop production and processing and export diversification.Since its inception in 1998, over 30 edible oil millers have been set up mainly in the north and northeastern countryside.
VODP's Project Coordinator, Mr. Connie Masaba, said, "One of our main objectives is import substitution. We think that if the palm oil comes on board, it will go along way to meet all the objectives we have targeted"
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The Kalangala Oil Palm project, together with the $28 million oil refinery plant will bring Bidco's total investment in Uganda to about $130 million, making it is one of the largest foreign direct investments in Uganda.
However, since its inception, the oil palm project has faced a lot of criticism from the public and the media.
Bidco Managing Director Rao Kodey said negative publicity is sending wrong signals to the market. "The way people talk about this project, you may think that this is the worst thing that has ever happened. Everybody is talking in a destructive mood. I don't know how to overcome this," he said.
The Monitor
