The Ugandan shilling that has remained somewhat stable in the past few weeks of trading is expected to maintain the trend over this week.

The latest numbers from the Bank of Uganda indicates that the local unit traded in the range of Shs 2,581-2591 against the US dollar as opposed to last Friday’s trading that was recorded at 2585/2600.

Standard Chartered Bank Uganda limited yesterday (June 11) announced a 17.5% interest rate for salaried customers intending to apply for personal loans in the bank.

This rate is lower than the bank’s official minimum lending rate currently at 19.5%.

Local wine makers cry foul over imports, high taxes

When I approached the wine booth in one of the large supermarkets in Kampala, I interacted with Judith a shopper who among other goods was shopping some type of wine. I asked her about her favourite brand and type of wine.

She was quick to answer. “I am interested in foreign made wines,” she said. “I believe they meet international standards.” When asked why she was not for locally made wine, Judith said, “I just don’t like things made in Uganda. I don’t trust our standards.”

Newrest state of the art kitchen at Entebbe Airport set to spur Uganda’s aviation industry

On May 24, the aviation industry in Uganda reached a new milestone when President Yoweri Museveni commissioned the Newrest Uganda In-flight Services (NUIS) kitchen at Entebbe International Airport.

Given the international profile of Newrest, the 3rd, biggest in-flight services provider in the world and the leading French company in in-flight catering, aviation players are positive that the development would not only market Entebbe airport at the international stage but also build the confidence of international airlines in the country and boost the local catering industry.

Ignie Igundura, the Civil Aviation Authority (CAA) spokesman, told The Independent on May 31 that international airlines, which in the past have been forced to airlift their own food from other countries, will now have an opportunity to pick it from Uganda.

That means more space and weight available for Ugandan commercial cargo. The unit did not come on the cheap - it cost more than $7.5 million (over Shs 18 billion), and Uganda In-flight Services Ltd, the French company’s Ugandan partners, raised part of the capital to make the 50-50 partnership. NUIS’s state of the art kitchen is now able to provide international airlines with fresh onboard meals.

The coming of Newrest sees the number of French companies operating in Uganda rise to about 30. The outgoing French ambassador to Uganda, Aline Kuster-Menager, told The Independent that when she first came to Uganda, there were only ten French Companies operating in the country.

The number has since grown – thanks to the political stability and sound macroeconomic management of the country. She said 80% of the food prepared by NUIS is bought from Ugandan suppliers and that the company employs more than 300 Ugandans.

“This has raised the local catering industry to international standards. I want more French companies to replicate this,” she said.

Efforts to get a comment from the NUIS board chairman William Byaruhanga were futile as he was reported out of the country for most of the week.  But according to press releases posted on its website, Newrest is a global leader in multi-sector catering company. With 2012 revenues of almost one billion Euros and more than 23,000 employees world-wide, Newrest is present in 46 countries across the globe.

In Uganda, NUIS enjoys absolute monopoly because of the requirement that all the products and processes for in-flight catering must comply with the stringent World Food Safety Guidelines for Airline Catering. This makes entry very expensive and difficult. Products must not be extremely hygienic but must also meet the dietary needs of thousands of passengers based on religious, cultural, medical and health reasons, which is no mean feat.

“We rigorously implement Hazard Analysis Critical Control Point (HACCP) standards and most of our units are ISO 9001 certified,” the company says. Newrest serves approximately 450 airlines and with 61% of global turnover and over 17 years of experience in the field, Uganda’s aviation industry has surely come of age, according to Igundura.

In Uganda, partnerships have been developed with local catering institutions under which students complete an internship at the in-flight kitchen. Following the internship, the best students are offered jobs. But even those who go away to work elsewhere go away with world-class skills, experience and exposure, which is expected to be a big boost to the industry.

In a bid to support the local agricultural industry, NUIS promotes the creation of menus that use products in season in order to reduce reliance on imported foods. Additionally, buying locally limits the environmental impact due to pollution caused by transporting heavy food across borders.

Igundura, the regulator’s publicist, said companies like Newrest are looking at the attractive prospects of the Ugandan market, which he said is growing at an annual average of more than 10%.   Entebbe International Airport handled more than one million arriving passengers in 2010, up from slightly over 781,000 in 2007.

In January 2013, international traffic for 2012 was put at 1.23 million passengers, a growth of 14% from 2011.  The airport currently has 21 airlines operating on it.  Apart from the booming tourism industry, Uganda is also increasingly becoming a formidable player in regional and international affairs, given the number of international conferences the country is hosting on a regular basis.

In 2012, Uganda was voted the top tourism destination in the world, while Entebbe won the 2012 Routes Africa award as the best marketed, having attracted four international Airlines in 2011.  Coupled with all these, the discovery of oil in Uganda is likely to spark a significant economic boom, which means that Entebbe should only expect a lot more air traffic in the next few years. Companies like NUIS are investing for the future.

Rising aviation figures

According to the International Air Transport Association (IATA), African airlines have seen solid growth in air travel as a result of a sustained increase in trade and rapid economic expansion in some local economies.  Globally, passenger traffic results for April 2013 showed a 3.2% increase in demand over the same period in 2012.

Emerging markets are continuing to lead air travel growth, with all regions reporting year-over-year gains.  African airlines’ traffic climbed 4.7% compared to April 2012, second best among the regions. Africa was the only region to experience a rise in load factor compared to 2012. Companies like Newrest are thus seeing great potential in African markets, but even globally, prospects look good for investors in the industry.

Global passenger traffic is expected to increase by around 5% annually and will reach 3.6 billion by 2016. These figures, according to IATA, underline the challenges and opportunities facing regulators and players in the aviation industry.

NUIS’ clients in Uganda include Air France, KLM, Air Uganda, Brussels Airlines, Ethiopian Airlines, Qatar Airways and the airlines operating for the various United Nations missions in the region. Soon, if negotiations succeed, Emirates and British Airways could also get on board.

The company will exclusively provide in-flight food - a light meal served to passengers aboard an aircraft. Such a meal is typically part of the air ticket. Most meals on international flights are charged at about $10 (about Shs 25,000) per person per meal.

Ms Jennifer Musiime, the marketing director for Air Uganda, said customer demands and tastes have evolved, which means that the quality of meals that are served on the airlines must keep pace with the evolution.

There are increasingly longer flights, which makes it a necessity to serve quality meals.  She said Air Uganda is a NUIS client because it “fits into Air Uganda’s strategy of supporting local suppliers and producers.” She said with their new state of the art kitchen/unit, NUIS’ services and products are expected to improve tremendously.

She suggested that this is an indication that the in-flight catering industry has grown but adding that further growth would depend on the growth of the aviation industry in general. “If the airlines and passengers increase, in-flight services will also increase,” she added.

She said much as it would be good for the airlines and passengers to have more choices, it wouldn’t be easy for NUIS to get a competitor anytime soon because theirs is a very complex and specialized industry, which means that the market has to be quite busy before you can get another competitor.  “It would be good to have a competitor but not many can come into the market when they are not sure of making a return on their investment,” she said.

The French company appears to be looking at a bright future, knowing that it will make a good return on their investment as the airport gets busier in the coming years.  Indeed, with the government working to expand Entebbe International Airport to meet required standards, the in-flight catering business is set to grow in leaps and bounds as the number of passengers is expected to rise.

In tandem with passenger and airline expectations, CAA is developing a national Civil Aviation Master Plan (CAMP) that will focus on aviation infrastructural expansion efforts. The plan envisions an expanded passenger terminal building, a new cargo terminal, an aircraft maintenance centre plus a new fuel farm.  These are expected to attract more air traffic to the country.

With the upcountry airfields at Arua, Gulu and Kasese set to be elevated to international status, the next five years are likely to bring good returns NUIS and other prospective investors in the industry.