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From: "Patrick Bamwine" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Subject: KAMPLA'S SOLID WASTE
Date: Fri, 17 Mar 2000 19:15:48 -0500
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Mr.. Bwanika;
I'm an environmental sociologist and have been following some of your postings with personal interest ... thanks! If possible can you send me information about how city garbage in Kampala is currently disposed of? I know the dilemma of collection problems - I want to know whether they have incinerators or plan to. Lastly, do you have the direct contact in KCC I could write to or call. THANKS. Keep up the good work.
Patrick K. Bamwine, Ph.D.
Assistant Professor
Division of Social Sciences
Campbellsville University
One University Dr. UPO Box 1362
Campbellsville, KY 42718
Phone: (270) 789-5538 (office); 469-3551(home)
Fax: (270) 789-5050
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Date: Sat, 18 Mar 2000 11:34:06 +0100
To: [EMAIL PROTECTED]
From: Bwanika <[EMAIL PROTECTED]>
Subject: ugnet_: What can Ugandans do ?
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Netters!
The failures of Uganda banks and other financial institutions and then
these stories below are classical. In a sense that it is still a small
portion of our population which can handle large corporations
/organisations within a national setting.
This is worrying if we think in terms of creating indigenous socio-economic
infrastructure. What can we do about it in wake of capital flight given to
the rapid communications infrastructures emerging all over the world?
I will send an article, which Journalist Onyango Obo wrote in 1997 - it is
an interesting one challenging our education institutions. I do believe we
must look into these structures seriously in order to understand our
organisation disabilities.
----------------
Creps' Bitter Failure
March16, 2000
Kampala - Examples of wasted business opportunities seem to dog Ugandans
the way hyenas stalk a wounded buffalo. Creps, the pineapple drink that
caused a major sensation in the early nineties, is an object lesson.
Diversification of the economy, by encouraging production of
non-traditional items like pineapples for the cash market, has long been
accepted as insurance against volatile coffee prices and vulnerable foreign
exchange earnings.
Eighteen years ago and to their credit, Masaka Cooperative Union (MCU) went
into the non-traditional sector in an admirable way. They bought machinery
to develop a canary. MCU later floundered in an equally miserable way,
mostly because short-term gains clouded their judgement and vision.
The Creps drink, was a classic example of how this country's economy should
be anchored. It involved processing locally sourced inputs to produce a
value added product, with considerable future potential for export.
The foreign exchange component is low, administration of taxing is easier
as opposed to imports, farmers have a ready market and the consumer enjoys
a relatively cheap and healthy drink. There was also scope for making
canned fruit products.
In an interview with Business Vision, the former manager, George William
Kisenyi said MCU bought the machinery in l982, but due to civil wars it was
not commissioned until l988.
"The Union borrowed approximately US$930,000 from the East African
Development Bank to establish it. The plant was bought at US$780,000 from
Mother and Platt of India and arrived in Uganda between 1983 and 1984. It
was not installed until 1988, after a long exposure to the weather,"
Kisenyi said.
According to the MCU chairman at the time, Mr. John Mary Kasozi the delay
in installation was caused by a lack of funds to build a factory and fix
the machinery lying in the open at the Union premises. An invitation for
king rust to set in. This exposure severely affected the moving parts.
Production of 1,000 crates of beverages per day was never realised.
"The poor performance started during production trials, when the engineers
from the plant suppliers were testing the machines. The daily production
averaged only between 200 to 300 crates of beverages, which was far below
the estimated rate. However the suppliers refused to rectify the anomaly
saying it was not their fault that the machinery had been so long exposed,"
Kisenyi said. "The problems that contributed to the closure of the canary
included failure to get the machinery required for overhauling and
replacing the rotten ones after the commissioning of the plant. It was
estimated that repairs alone required US$62,000 which was unfortunately not
available," Kisenyi said.
"They forgot the fundamentals for any start-up business. You can't change
working capital into profits, just to suit your purposes," a source with
the East African Development Bank told Business Vision. He added.
"Secondly, your asset base must be respected, by care, maintenance and
repeatedly capitalised by new injections of money and technology to sustain
production. For heavens' sake why did they not adequately protect their
machinery?" But Martin Kyeyune a former employee at the Kyabakuza canary
said: "We were in a big fix. There was a civil war going on. Much of cash
from coffee was stolen. There was a lot of looting and confusion. Do you
expect people to overly care about machines when your life is in danger. We
virtually had to start from nothing and getting more money was very hard at
the time."
In the early nineties, the name Creps was giving Lake Victoria Bottling
Company some food for thought. Although its market penetration was far less
than Pepsi, its novelty and relatively cheaper price captured the
imagination of the consumer. Its one disadvantage, was that Creps was
better drank cold due to the pineapple dregs. However such technicalities
could have been handled if the MCU were truly committed to the business.
The farmers were the first to feel the pinch. Records indicate that 50% of
the pineapples processed, came from Masaka, 20% Bushenyi and Mpigi 15%.
Today, many farmers feel a deep sense of betrayal and cynicism about
anything to do with MCU.
MCU itself was caught flat footed, like many other major cooperatives when
Government liberalised the coffee sector in 1991. The flexibility of
private coffee buyers and processors literally pulled the rug from under
their feet. This also squeezed their cashflow, limiting any prospects of
recapitalising the canary.
"We should have concentrated on keeping the Creps business going, but
management in my opionion lacked any ideas about priorities since there was
so much politics and greed for money involved at the interlude," Kyeyune
said.
Early last year, Vice President, Dr Specioza Wandira Kazibwe announced at
Bukukula sub county headquarters that a Mr. Chadrakant Patel had bought the
canary machinery.
MCU Production Manager, Mr. J. Majwala told Business Vision that they sold
the machinery to Patel for sh100m. With the intention that once
rehabilitated, farmers' livelihood and employment would be made better. To
date production has failed to take off.
During an October 1999 meeting with the Masaka District Council, Patel
assured members he would revive the canary. His leading problem was that
the water available was unsuitable and his European markets were very fussy
over such issues. He also told Councillors the charges at the Nabajuzi were
too high and it was necessary to drill a borehole. Patel declined to talk
to Business Vision over the issue.
Majwala said, "We do not know where he put the machinery." MCU still owes
EADB the balance of the loan, which after re-negotiations had been reduced
to half by January 1994. MCU also nurses a belief that EADB takes some
blame by brokering the purchase of old machinery.
----------------------
Flower Sector Faces Collapse
March 16, 2000
Kampala - Uganda's cut flower industry is currently at the verge of
collapse, due to gross errors made during the early stages of various
projects.
According to a reliable source close to preparation of a report for Bank of
Uganda (BOU) on the sector, many aspects were taken for granted. Especially
the idea of quick cash returns. Being a completely new business venture for
Ugandans, may entrepreneurs did not have the proper know-how.
In the report being drawn up by Danek (Kenya) Limited, the consultants
hired by BOU, say there were many blunders made in running the sector,
'whose potential as lead foreign exchange earner in the non-traditional
agricultural exports cannot be underestimated' The stakeholders include
growers (exporting companies) and promoters (support agencies like lending
institutions).
Following a host of problems, to the extent that several companies have
already pulled out or gone into receivership), stakeholders now agree they
had little prior knowledge about the industry and were inexperienced.
'There being no prior know-how in preparation of feasibility studies for
flower projects, it would appear that all the promoters were recommended to
seek assistance from the African Project Development Facility (APDF) in
obtaining written proposals,' the consultants suggest.
To make things worse, Danek discovered that the "APDF assigned the
technical aspects of these projects to one Swedish consultant who had no
experience in Uganda.' Part of their report states that the Swedish
consultant did not carry out performance trials for the flowers and in some
cases recommended planting of tea hybrid's varieties which were not only
unsuitable for Uganda's climate but their viability in terms of freight
costs was doubtful.
Often growers bridged the gap of lack of know-how by engaging consultants
from Israel. These also recommended parent planting material breeders not
suitable for Uganda.
Prof. Patrick Asea of the Economic Policy research Centre, in an August
1999 report on "Community and economic Impact of export Diversification;
the cut flower industry in Uganda' said there were 35 varieties of roses
commercially grown in the country.
As of 1999, price trends for Ugandan growers dropped to thin margins when
compared to other countries. Import prices for hybrid tea and sweetheart
roses dropped to 20% and 25% respectively. Anticipating good sales from
exported flowers, the growers' feasibility studies to lending institutions
contained high rates of return. Consequently, the lending institutions
shortened the loan pay-back periods to four years with a one year grace
period. By not adequately understanding the dynamics of the industry many
local growers found themselves in deep trouble.
To date, they have failed to pay back the banks, whose interest rates are
normally 12% and more. This has resulted in many cases of going into
receivership. In 1999 alone, three flower companies, Royal Flowers, NBA
Roses and Harvest International were sold off after their owners failed to
pay back loans totally US$700m.
Prof Asea said the harm of optimistic projected returns is causing the
industry much pain.
For example, a number of feasibility studies projected kan average return
of US$0.35 cents per stem. Yet in reality the return is between US$0.08 to
US$0.10 cents.
"The issue of the lending banks insisting on exaggerated and unachievable
price returns, which are used in determining the loan repayment terms has
done the lot of harm to the industry," Asea was quoted last year.
Danek blames the lending institutions for not assisting the growers in
writing proper feasibility studies that were used in securing loans from
local lending institutions.
'The Approved Financial Institutions (AFIs) do not appear to have had
sufficient technical capacity within themselves to independently
re-appraise the projects themselves. Neither did they attempt to secure
external know-how for evaluation of the feasibility studies,' the report
states.
Danek also point out the errors made by the AFIs during the loan processing
procedure. 'These were processed with alacrity and so was legal
documentation. Prolonged and ossified disbursement procedures caused delays
in the implementation of projects.' Danek adds that the four to five year
loan period was fairly short for a new industry, especially being
agricultural by orientation.
The currency denominations of the loans was another hindrance.
'Inevitably, most of the projects secured US dollar loans, whereas actual
sales which were auctioned destined were sold in Dutch florins. This
exposed the projects to currency depreciation between the dollar and the
florins at approximately a 10% rate.' Back at home, the growers had to
first convert the florins into dollars since the former are non-operational
here and finally the dollars into shillings in order to meet their local
running expenses.
Danek also notes, 'Farmers relied on the same supplier of planting material
from Israel who had a branch in Kenya, which has now gone into liquidation,
such that farmers have no recourse for recompense'.
Further trouble came in the guise of the El Nino weather pattern that
adversely affected the projects. Greenhouse were severely damaged, exposing
th flowers to the weather and diseases.
'This destruction of the houses and plants necessitated additional repair
costs which had not been envisaged at the outset. In all cases, the AFIs
did not give due consideration to natural calamity, but demanded strict
adherence to the repayment schedule and at times penalised projects for
factors outside their control,' the report reads.
In its recommendations to BOU which the Central bank has yet to decide on
Danek say, 'BOU through the appropriate Government arm should source for a
long term concession of credit up to 40 years for development by way of
assisting the pioneers in the sector replace unsuitable or diseased
varieties. As well as for expansion, given that all projects have
infrastructure to run bigger growing operations.' Before commissioning the
study, BOU last year wrote a memorandum to all financial institutions that
lent money to flower firms now on verge of collapse, not to call back the
loans until all avenues to save them have been secured. The report is a
central part of this objective.
Uganda Flower Exporters Association chairman, Mahmood Hudda says, "The
flower industry contributes about US$15m to US$20m in export value, which
amounts to almost 70% of the total nontraditional agricultural export value."
As of 1999, 74 hectares of land were under production, with total
investments of just over US$40m. Total production is about 100m stems.
__________
bwanika
url: www.idr.co.ug
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