Deal #1907

Tanzania
Created at
2013-02-15
Last update
2024-10-04
Last full update
2024-10-04

Land area

Intended size
8 000 ha
Size under contract (leased or purchased area)
  • [1998] 8000 ha
  • [2018] 6774 ha
  • [2024, current] 10000 ha
Size in operation (production)
  • [2024, current] 10000 ha
Comment on land area
In 2018, 1226 ha were given back to the government for the development of the Magombera Forest. Kilombero Sugar Company comprises of two adjacent agricultural estates and sugar factories, Msolwa and Ruembe, situated on either side of the Great Ruaha River and linked by a low-level bridge. KSCL has the largest crop estate in Tanzania covering 26,000 hectares; 10,000 ha belonging to KSCL and approximately 16,000 ha from the small holder farmers - Kilombero Growers. (Source: Company website, 2024) Expansion project ongoing including a new factory, to be completed in 2024 . (Source: Kilombero News: Plants for Kilombero expansion project arrives in Dar es Salaam) The expansion is expected to increase the amount of sugar cane sourced from growers by nearly an additional 1 million tons per year from the current 600,000 tons per year by 2026/27 (Source: Kilombero News KSCL to double its contribution to economic growth)

Intention of investment

Intention of investment
  • [2018, current] Biomass for biofuels, Food crops, Renewable energy unspecified (6774 ha)
Comment on intention of investment
-Kilombero Sugar Company Limited is currently the market leader in making high quality sugar under the Bwana Sukari brand name. -IDTL produces Extra Neutral Alcohol (ENA) of 12500kL p.a. with a view to increase to +/-17000KL p.a. after the Expansion Project. Successful downstream diversification strategy into ethanol production from the previously 12 Million litres of potable alcohol produced per annum to 12.5 Million and awarded the Prestigious Monde Selection Grand Gold Quality Award for our home-grown potable alcohol. -Recycling of sugar cane waste to produce energy. (Source: Company website)

Carbon offset project

Carbon offset project
No

Nature of the deal

Comment on nature of the deal
1960 Establishment of Kilombero Sugar company limited (KSCL), between 1967 and 1998 KSCL was nationalized and operated as a parastatal by the National Agricultural and Food Corporation and, after 1974, by the Sugar Development Corporation (SUDECO). In 1998, KSCL was re-privatized. Source: Isager et al. 2021

Negotiation status

Negotiation status
  • [1998, current] Concluded (Contract signed)

Implementation status

Implementation status
  • [1980] In operation (production)
  • [2018] In operation (production)
  • [2024, current] In operation (production)

Contract farming

Contract farming
Yes
Not on leased / purchased (out-grower)
Yes
Not on leased area/farmers/households (out-grower)
  • 12000 ha
  • [2024, current] 16000 ha 8000
Comment on contract farming
Outgrowers supply around 42% of the company's output. Have provided credit, bulk inputs, transport, training to the outgrowers. In recent years, a mix of over supply plus lower yields have impacts certain outgrowers. data source #10 (Large-Scale Agricultural Investments and Smallholder Welfare: A Comparison of Wage Labor and Outgrower Channels in Tanzania) lists in detail results of their study on the outgrower scheme and impact it has on local communities. KSCL has the largest crop estate in Tanzania covering 26,000 hectares; 10,000 ha belonging to KSCL and approximately 16,000 ha from the small holder farmers - Kilombero Growers. The company currently produces 126,000 tons of sugar per annum. The company's supply chain includes approximately 8,000 grower farmers supplying about 600,000 tonnes of cane every year. 45% of the sugarcane crushed by KSCL is supplied by independent farmers; the remaining 55% comes from the company's own land. Over 200 businesses have been registered in the Kilombero valley as a result of this supply chain. (Source: Company website - our story, 2024) Planned expansion project: The expansion will create self-employment opportunities as the number of growers is expected to increase from the current 8,000 to between 14,000 and 16,000 growers. (Source: EXPANSION PROJECT - K4, Kilombero Sugar Company, 2023)