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Tanzania’s population is growing by an average of 2.6% per year and there has been an annual increase in sugar consumption in the last decade as a result. There is also a deficit in supply to the local market. In 2021 we decided accordingly to build a new sugar factory, known as ‘K4’, which will dramatically increase Kilombero’s annual production capacity from 145,000 to 270,000 tonnes and should take our share of the Tanzanian consumer sugar market to approximately 40%. The factory will be commissioned in June 2025 and will create 2,000 direct jobs in the cane-to-sugar value chain.
Our significant investment in K4 will enable us to reduce costs per tonne of sugar we produce. The factory will have the latest equipment and be highly automated, with the capability to produce different pack sizes according to demand and store up to 110,000 tonnes of product on site, reducing the need for multiple distribution warehouses. K4 will generate all the energy and electricity it needs for its on-site operations from bagasse, the sugarcane waste product, and each year for the next 10 years it will export 10MW of electricity to the local grid to create an additional revenue stream
The K4 sugar factory and warehouse under construction at Kilombero in Tanzania
This expanded production capacity requires an increase in the supply of sugar cane from 1.25 million to 2.5 million tonnes per year. This is an opportunity for the local growers. Their numbers are forecast to increase from 6,500 to 12,000, making K4 the largest community-inclusive rural economic development project in Tanzania.
A key strategic priority for the project is community inclusivity. Accordingly, Kilombero Sugar carried out climatic and agronomic reviews of the surrounding farming area and conducted surveys of the local grower community to assess interest in cane cultivation. Kilombero Sugar will further support local cane farmers by providing information and analyses of the farms. The project envisages local growers will supply some 1.5 million tonnes of cane a year, with 75% of the supply expected within the first six years. Kilombero Sugar’s cane supply from its own farm will also increase to 1 million tonnes a year, with investment to be made in upgrading irrigation equipment as part of that.