Fort Portal, Uganda | THE INDEPENDENT | In 2017, the factory was sinking into debt and on the verge of closure. The factory had a debt of 6.4 billion shillings owed by several service providers including financial institutions.
According to the factory’s annual report for 2021, the company made a loss of 2.1 billion shillings, which was attributed to low production at the factory.
Methuselah Kasukaali the Chairperson Board of Directors Mpanga Growers Tea Factory, says that the resumption of operations comes after the Uganda Development Cooperation- UDC invested in the company by purchasing shares/ equity worth 4.4 billion shillings.
According to Kasukaali, the money will help to operationalize the factory to increase production, and the profits used to clear the debts. Kasukali says that the out-growers have been asked farmers to resume supplying the factory with green leaf.
Following the indebtedness, the factory reduced production after the out growers resolved to sell their tea to other tea factories in the Tooro region.
Saul Kusemererwa Balisima, the General Manager says that despite resuming operations, it is facing a number of challenges including fluctuating tea prices at the Mombasa auction market, lack of inputs like fertilizers for farmers, the deteriorating green leaf quality, and the depreciating quality of machinery.
Kusemererwa says that the out-growers have been asked to supply quality green leaf so that it fetches good prices at Mombasa.
He also says that the factory is considering supplying fertilizers to the farmers on loan to improve the quality of the green leaf.