Madhvani of Uganda ‘Ready’ to Build New Sugar Plant After Ruling

Madhvani Group, owner of Uganda’s biggest sugar producer, said it’s “ready” to build a second sugar plant for as much as $100 million after a court last week ruled against an attempt to block it from buying land to expand.

Investment in the project in the northern Ugandan district of Amuru will be decided on once Madhvani has studied the Feb. 3 High Court ruling, Koduvayur Parasuraman Eswar, the company’s corporate affairs secretary, said by phone today from the capital, Kampala.

Ugandan politicians including Simon Oyet, a former lawmaker, accused Madhvani of trying to buy the land through state authorities without directly negotiating with local communities. The group announced plans for a second sugar plant in the country in 2006.

The High Court in the district of Gulu ruled that the Amuru Land Board, which was sued by politicians including former lawmaker Livinstone Okello Okello in 2008, was entitled to allocate the land to Madhvani, the Kampala-based New Vision newspaper reported yesterday.

“We are waiting to see the copy of the judgment then we decide on the way forward,” said Eswar. “We are positive, we are ready and willing to go on with the project.”

Planned investment for the project has risen to as much as $100 million from an earlier estimate of $70 million because of delays caused by the court case, said Eswar. The company will fund the project from internal resources and external financing, he said, without providing further details.

Production by Kakira may climb 36 percent to 180,000 metric tons this year, the Uganda Sugar Cane Technologists’ Association said last month. Output by the nation’s three biggest growers of may advance 28 percent to 346,000 tons in 2012, it said.

To contact the reporter on this story: Fred Ojambo in Kampala via Nairobi at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.

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