Great thing$ happen when hard work meet$ appropriate financing- the sweet tale of Uganda Development Bank and Bwendero Dairy Farm in Hoima district Life is said to be like a sugar cane. When you eat from up, it is tender but less sweet. The lower you go, the harder it gets, but the sweeter it gets. The story of Bwendero Dairy Farm (BDF) in Hoima district, in western Uganda, is not any different. BDF had always existed since the 1960s but its story did not fully manifest until after 2018. 

BDF was started by the late Hon. Caesar Joseph Magara in 1964, on a small piece of land in Kitoba village, Hoima district. Caesar Magara was a Member of Parliament in the 1980s. When he passed on, the family inherited the business with John Fitzgerald Magara, as the Managing Director. The other children are also involved in the running of the business as directors.  The family expanded the farm and continued selling unprocessed milk.

Later on, BDF diversified into the manufacturing of Extra Neutral Alcohol (ethanol)- an important base for spirits and alcoholic beverages, within the food and beverage industry, the cosmetics and beauty industry, and for pharmaceutical and medical grade purposes. The ethanol was being manufactured from molasses- a byproduct of sugarcanes, bought from sugar manufacturers in the Bunyoro area. 

However, supply constraints would lead BDF to plant its own sugar cane- this time not only for alcohol but also this time for sugar production. This is where Uganda Development Bank (UDB) came in handy. UDB is a government-owned development finance institution (DFI)  that exists to accelerate socio-economic development by providing sustainable financial solutions to key sectors of the economy such as agriculture, manufacturing, human capital development, infrastructure, as well as tourism and hospitality.  

Maximising potential

BDF, in 2018 secured a substantial amount of financing from UDB and according to John Magara, this marked the beginning of a new phase in the company’s 5-decade history. 

“To build and expand its capacity, Bwendero sought support from Uganda Development Bank Ltd to acquire the necessary infrastructure suitable for its business. With financial support from UDB, Bwendero has built its capacity to fully meet the sugar and ethanol market demands as well as become more competitive and capture a sizeable market share,” says John Magara.

“Due to support from the UDB, the company has been able to establish a fully automated state-of-the-art 750 tonnes of cane per day (TCD) sugar mill, a 2,500 acres nucleus farm estate as well as recruit a significant base of out-grower farmers,” he adds.

“With the support from UDB, the company has also modernised and increased its handling, processing, and storage capacity to meet the required quality and quantity in the market. We have also put together a professional team of over 100 employees. With all this in place, we have been able to double the operation capacity of the plant from 38.6% in 2021 to 77.3%, producing 580 tons per day of sugar in 2022,” he further explains. 

With more sugar cane crushed, BDF also now generates some 2 megawatts of electricity from bagasse that it uses at its complex. Bagasse is the fibrous residue left after sugarcane crushing. When it is burnt in boilers, it produces high-pressure steam that turns turbines to produce electric power.  

BDF also now produces and processes at least 4,650 tons of maize grain products. The farm now also keeps and fattens cattle for beef production. Beef is processed and sold in Hoima and the surrounding areas, where it is much sought after for its exceptional tenderness. 

The company has also been able to modernise its distillery to increase its ethanol production. The company also makes its own beverage spirit under the brand Lebo. BDF also has in place a 12 tons per-day carbon dioxide plant. Carbon dioxide is used largely by bottlers of beverages. One of their largest customers is Crown Beverages Limited, the franchisee bottlers of Pepsi products in Uganda.  

John Magara attributes a significant part of BDF’s success to UDB’s “financial support and technical professional guidance”. 

“Uganda Development Bank has been our great partner,” he reiterates.

Impacting communities in Hoima and beyond

From a humble beginning, BDF is growing steadily since the 1960s to become a big sugar processing and distillery entity that commands a significant market share in Uganda as well as contributes substantially to Uganda’s export trade.  

In 2022 alone, the company exported 3,250 tons of sugar to the Democratic Republic of Congo (DRC) worth about UGX9 billion.

To supplement the company’s 2,500-acre nucleus sugar plantation, the company also works with 257 contract farmers, growing sugar cane on approximately 940 hectares of land. 

“We contribute towards the increase in productivity of our farmers by offering modern production tool and technology including tractors, among others, extension services and inputs every season. For example, over 2,800 tons of seed cane were distributed to farmers last in 2022 alone,” John Magara explains, adding: “The company pays competitive prices to the farmers, and this provides household incomes of an average of UGX 500,000 per month, uplifting over 1,000 people out of poverty every year”.

In 2022 alone, BDF purchased from out-grower farmers a total of 86,974 tons of sugarcane paying them approximately UGX 8.7 billion. In total, including out-growers, the company currently employs over 600  people, directly and indirectly. 

The company now plans to expand the sugar plant cane crushing capacity to about 5,000 tonnes of cane per day. This will also mean more capacity at the distillery, as well as more electricity generation. To facilitate this, it plans to grow its base of out-grower farmers to 10,000. The company has also already diversified into other agriculture value chains such as  Hass Avocado farming for export. For this too, BDF is looking to enrol more out-growers to spread the benefits.

“I would like to thank Uganda Development Bank for the great support they have extended to us. We sincerely thank UDB for the good service, good customer care, knowledge of the farmer’s needs and above all affordable support. We wish to applaud the entire team at Uganda Development Bank under the leadership of Ms Patricia Ojangole for her great work and contribution towards the development of Uganda,” John Magara reiterates. 

“I would like to rally farmers and other Ugandans in the various sectors and the people of Bunyoro in particular, to take advantage of the funding opportunity at UDB to fund and grow their businesses to transform our country and communities.  I would also like to thank the Government of Uganda for recapitalising UDB. They should put in more money,” he concludes.