KAPEKA: AN UNLIKELY INDUSTRIAL AREA

If the boss of Goodwill Ceramics Ltd is to be believed his products are causing upheavals in the Uganda tile market.

The $30m (sh115b) factory tucked away in Kapeka, about 60 km from Kampala, started operations in April and is already making serious inroads into the local market.

“The feedback we have from the market is that our tile are too hard,” said Goodwill Managing Director Yang Frank with a chuckle.

“That with other tiles they can use simple cutting tools but with ours they need more serious equipment.”

This speaks to the durability of his product.

A straw poll of hardware dealers in Kampala confirms the perception that the tiles are of better quality than those imported from China and the pricing putting downward pressure on tiles in the market.

"The factory has the capacity to produce 40,000 square meters of tiles a day in 200 different variations. They have built up their operations to 28,000 square meters a day. They sell under half their daily production at 12,000 square meters. In storage they have enough tiles to supply all of Uganda for two months...

But this is only one of the establishments setting up in the Liao Shin Industrial park in Kapeka, which covers over five square miles.

Around the corner Ho & Mu Food Technology have just done their initial export run to China of candied dry mangoes and factory manager Majorie Mugenyi is confident of future prospects.

“Our capacity is to process 20 tons daily into four tons of candied dry mangoes. This will be expanded to 40 tons,” she said in an interview, with plans to expand into pineapples, jackfruit and passion fruit.

So far they exported all the initial 180 kg of fruit to China but are looking to Europe, Canada and the region as potential future markets.

The factory was closed for maintenance but she said at peak production they employ a hundred people from the surrounding areas, nine in ten of whom are women.

By the end of the year the industrial park promoters project that ten companies will have come on line, producing everything from vegetable oil, animal feeds, industrial alcohol, electronics and textiles.

At full capacity the industrial park will employ 15,000 people.

It is an interesting snap shot of what form our industrialisation may take.

Looking at the portfolio of industries lining up to take up space at the Kapeka facility, the vast majority are looking to exploit the country’s natural endowments, be it clay in the case of goodwill ceramics or fruit or vegetable oil or textiles.

Yaheye International Investment Group has the capacity to process 3,000 tons of maize annually and for now is processing maize into flour for the domestic and regional markets. It is however planning to triple it capacity and go into the manufacture of animal feeds, industrial starch and alcohol.

But more importantly they are setting up for export and as a consequence the investments being planned for not less than $10m in the park. This is important because if we are going to generate jobs and boost tax revenues we need to think about producing for export. Import substitution has undeniable benefits in saving foreign exchange but producing for exports --- especially food means you have to adhere to international quality standards and produce industrial quantities to sustain the related industries.

Ho & Mu have ten acres of mango, about 3,000 trees, under development, but will still need to reach out to farmers as far afield as Kasese and eastern Uganda for their supplies.

"The sad thing for the existing factories is that they do not have reliable power, despite the reported surplus in production by our dams...

Goodwill Ceramic reported that since their inception in April they had suffered 113 power outages the equivalent of 15 days without power during the period.

Efforts are underway to increase the existing 22kva line to 133 kva, which everybody thinks should come with an improvement in supply but not necessarily reliability.

It is an interesting venture in the heartland of the Luwero Triangle, which if managed well and with proper support from government should see a transformation not only of the area but of the country, as similar parks are set up around the country.