East Acholi Cooperatives Union Leases Ginnery To South African
KITGUM, Uganda: East Acholi Cooperatives Union Limited have for four consecutive years topped the pack as the leading producers of cotton for export in the country.
Last year, (2018) the union produced 17, 000 bales of ready for export lint. What is however surprising, that TheCooperatorNews has established is that all this is not attributed to the union, at least as the top Union brass revealed to us, but to the new team that was leased the entire ginnery. We can reveal that East Acholi Cooperatives Union Limited leased their ginnery to Gulu Agricultural Development Company Limited (GADC).
When we made inquiries, we established that man behind GAD is Mr. Bruce Robertson, a South African national who also doubles as the chairperson of the Uganda Ginners and Cotton Exporters Association (UGCEA). Bruce, through his registered GADC, we established signed a five-year lease with East Acholi Cooperatives Union to handle the ginnery at an annual fee of Ugx120 million. According to documents, seen, Bruce Robertson is the chairman and Chief Executive Officer of GADC.
The EACU Secretary manager Mr. Okumu Okello Boaz, and the chairman Board, Mr. Obote Acell Karl Mark confirmed this to us.
“Yes, it’s true as a union we decided to lease out the ginner since we didn’t have the crop finance to purchase cotton from farmers. We leased it to GADC for five years at a fee of shs120 million annually: Mr. Okumu.
Is there Value for money?
We visited the ginnery and made simple calculations after a chat with the Ginnery Manager, Mr. Otukei Robert. The ginnery has a capacity of producing between 200- 250 bales of cotton daily. According to Otukei, they are currently producing under capacity, that is a minimum of 150 bales of cotton, (lint) daily.
A normal bale ranges between 205 to 215 kgs. The price for lint, international used to be $74 cents per pound but has since dropped to $68 cents. Simple calculations indicate that one bale of 215kgs is approximately 500 pounds. Thus one bale of cotton fetches $350 (shs1.27m).
In our simple mathematics, we calculated that in a day, EACU loses ($52,000/shs190m).
According to Otukei, they employ 57 workers, majority casuals who work in three shifts of 8 hours daily, each earning between shs9,000- shs7, 000 ($2.4-$1.9) daily. The 8 technicians, whom we talked to are paid shs350,000 ($80) per month. In a week the plant produces a minimum of 900 bales of cotton, that generates the firm ($315,000. Shs1.2b). In 2018, the firm sold 17,000 bales of cotton earning them over $6million (shs21billion).
Challenges crop in
much as they are reaping big from the cotton sales business, Otukei, says the challenges are enormous. Among them, he says is the rampant power outages that have left them to incur losses in purchasing for diesel to run their giant generators.
According to Umeme, the ginneries is the leading client in the Acholi sub-region with monthly bills ranging over 100 million. But despite being the leading clients, with perfect payment records, the ginnery suffers huge power outages at least twice-thrice a week.
“We have two generators, one with a 40-liter capacity and another with 27 liter capacity per hour respectively. That means when the power is off we use 67 liters of diesel per hour, that’s so expensive on our side,” explained Otukei. So when power doesn’t return within a day, the firm forks out shs4.8m in fuel to run their generators.
Other challenges Otukei said is the water shortage that has hit the area due to its semi-arid nature. “Sometimes I have to call the police fire brigade to bring for us water. These workers need plenty of water due to the high heat caused by the machines,” he said.
He said currently, they are faced with the low-quality supply of cotton, that he considers Below Range (BR). The best cotton is Above Range (AR). “The BR cotton has high production costs they are harvested when still row. “We use high power to press these BR cotton and that is what we are experiencing this season,” he said.
