bidco company profile final doc

Production of vegetable cooking oil in Uganda

PROCUREMERNT PLANNING, LOGISTICS AND STRATEGIC MARKETING IN BIDCO UGANDA LTD.

BY

MUJUMBUSI FRED

CHARTERED INSITITUTE OF PURCHASING AND SUPPLIES

A RESEACH REPORT PRESENTED TO:

MR KATOTO CHRISTIAN

1Compiled By Mujumbusi Fred, A Chartered Procure And Contracts Manager. Uganda

Management Institute


TABLE OF CONTENTS.

Abstract ………………………………………………………………………………………1

Chapter one …………………………………………………………………………………1.1

Introduction…………………………………………………………………………………..1.2

Back ground …......................................................................................................................1.3

Chapter two: Introduction…………………………………………………………….……2

Introduction…………………………………………………………………………………2.1

Organization of attachment ………………………………………........................................2.2

Vision of the organization……………………………………………………………………2.3

Mission of the organization……………………………………………………………….....2.4

Goal of the organization...……………………………………………………………...……2.5

Objectives of the organization………………………………………………………..…….3

Core values ………………………………………………………………………………..….3.1

Programs of the organization…………………………………………………………….……3.2

Activities of the organization…………………………………………………………….……3.4

Chapter two: technology used……………………………………………………………….4

Procurement……………………………………………………………………………………4.1

Logistics and marketing………………………………………….……………………………4.2

Conclusion ……………………………………………………………………………………5




BIDCO COMPANY PROFILE, PROCUREMENT, LOGISTICS AND STRATEGIC MARKETING TECHINIQUES

The aim of the study was to analyze the procurement, logistic and strategic marketing of the BIDCO oil Palm Company in Uganda.

1. To analyze the key elements of BIDCO’S strategic planning.2. To assess the relationship between strategic BIDCO’S Marketing and logistics.

INTRODUCTION

Republic of Uganda: Vegetable Oil Development Project

Introduction

The project

The Vegetable Oil Development Project (VODP) was approved by the IFAD Executive Board in April 1997; it has had a number of extensions and is now due to complete on 31 December 2011 and close on 30 June 2012. The overall objective of the project is to increase household cash income among smallholders by revitalizing and increasing domestic vegetable oil production in partnership with the private sector. The project has three very different subprojects:

(I) the introduction of commercial oil palm production on Bugala Island in Lake Victoria(II) (ii) The development of traditional oilseeds in northern, eastern and mid-western

districts of Uganda, and (III) (iii) Research and development (R&D) of essential oil crops, piloted in a variety of

districts.

Implementation of the Oil Palm Subproject has been affected by a number of delays, as a result of which oil palm planting on smallholder farms only began in 2006 and harvesting of fresh fruit bunches (ffbs) – the principle source of income for farmers – had not yet begun at the time of this Evaluation. In contrast, the other two subprojects have been going for eleven years.

Originally, the total project cost was to be US$60 million, consisting of an IFAD loan of US$20 million, US$33.1 million of co financing from the private sector partner, US$3.8 million from the Government of Uganda and US$3.1 million from beneficiaries. However, due to an increase in the scale of the Oil Palm Subproject, the private investor and the Government increased their contributions to US$120 million and US$12 million respectively, bringing the total cost to about US$156 million.




Objectives and methodology of the evaluation

Objectives and process. The interim evaluation was undertaken by the IFAD Office of Evaluation (IOE), as a standard procedure in preparation for a possible follow-up phase of the project. Its objectives were:

(I) to assess the performance and impact of the project; and (II) (ii) To generate a series of findings and recommendations to guide a second phase of

the project. The main Evaluation Mission was conducted from 2 February to 4 March 2009. The team visited the oil palm project area on Bugala Island, Kalangala district and six districts where traditional vegetable oilseeds and essential oil crops are being grown.

Methodology. The evaluation follows new guidelines of IOE for project evaluations. It reports on implementation results and assesses project performance (relevance, effectiveness and efficiency); rural poverty impact (five impact domains); innovation and sustainability and the performance of implementing partners. Each of these evaluation criteria are rated on a six-point scale.1

The evaluation has drawn on project monitoring and evaluation (M&E) data, a Mid-Term Review, three Baseline Studies and one Impact Assessment Study. Two extra studies were commissioned in order to assess social impact in the traditional oilseeds area: a participatory rural appraisal (PRA) of household level impacts and a macro-level analysis of poverty and vegetable oil consumption based on the Uganda National Household Survey data.

Country background

The main background factors of relevance to the VODP project are: agriculture’s diversity and changing role in the economy; its vulnerability to climatic shocks, insurgency and insecurity in parts of the project area, and the existence of a generally favorable policy environment. Uganda has achieved high rates of growth since the 1990s with large inflows of foreign direct investment and development assistance. Throughout this period, the policy environment has been stable and has favored agricultural modernization and poverty reduction. Particular emphasis has been placed on import-substituting subsectors such as vegetable oils.

Uganda’s population is predominantly rural (87% in 2002) and agriculture provides their main source of livelihood. Ugandan agriculture is dominated by small scale farming – primarily food crops – and has become increasingly integrated into the market. Traditional export crops (coffee, cotton, tea, tobacco) have declined because of disease or fluctuating world prices, and are being replaced by non-traditional exports such as fish, maize and cut flowers.

There are large regional variations in the prospects for agricultural growth and poverty reduction in Uganda. The northern region, where VODP’s work with traditional oilseeds has been focused, has less fertile soils, less rainfall and more erratic weather leading to recurrent drought and floods. In addition, the region has been affected by a twenty-year insurgency led by the Lord’s Resistance Army (which has only recently subsided) and periodic banditry and cattle rustling by




Karamojong herders in the north east. As a result of its impressive growth and strong pro poor policies, poverty declined from 56% in 1992 to 31% in 2005. However, poverty reduction has been much slower in the northern region.

Project performance

Design features

The project adopted a broad, value chain approach to the vegetable oil subsector that meant working with a variety of vegetable oil crops, stakeholders, institutional levels, and geographical areas. It required coordination with many public and private institutions at national, district and local levels.

The three subprojects have very different objectives, modes of implementation, geographic areas and supporting institutions. The oil palm subproject aims to establish a new industry from scratch with heavy dependence on a single private sector partner. It operates in a small geographic area, with new forms of land use and a plantation/smallholder mode of production. When fully implemented, it may reach 1,000 beneficiaries. The Traditional Oilseeds Subproject aims to expand smallholder production and processing of existing oilseed crops. It works in an extensive, agro-ecologically diverse region, with a variety of implementing partners, using traditional research/extension methods, and has more tenuous links to the private sector. It currently has over 200,000 beneficiaries. The Essential Oils Subproject aims to explore the potential for production of little known essential oils. It is a small-scale, experimental, and research-oriented initiative and is piloted in a variety of geographic areas. To date, there are some 1,000 beneficiaries.

There were major changes to the design of the Oil Palm Subproject following negotiations with the private investor (BIDCO/OPUL).2 The main changes were that the nucleus estate was to be expanded from 1,000 ha to 6,500 ha, which together with the 3,500 ha intended for smallholders and out growers would give 10,000 ha of oil palm on the island instead of 4,500 ha. Second, the intention to use degazetted public land for the nucleus estate was dropped, so land had to be purchased from private owners. Third, the pace of subproject development was accelerated so that targets would be reached within four rather than eight years.

Project implementation

Factors affecting implementation results.

The main problems for the Oil Palm Subproject were a five-year delay in finalizing negotiations with BIDCO and a further two-year delay in establishing the key institution for mobilizing smallholder participation in the project, the Kalangala Oil Palm Growers Trust (KOPGT). In addition, the project encountered substantial public opposition arising from complaints about




proposed tax concessions and concerns about the environmental effects of oil palm plantation on the island. A third factor was difficulty in acquiring sufficient land on the island for the expanded nucleus estate.

As far as the traditional oilseeds and essential oils subprojects are concerned, the main factors affecting implementation were exposure to insurgency, drought and floods. Latterly, the Traditional Oilseeds Subproject was also affected by the sub-division of the districts in 2005-06 and the re-organization of agricultural extension services, both of which debilitated the District Agricultural Offices (DAOs) – a key implementing partner for the project. The emergence of competing alternatives to the VODP-supported products and activities also undermined their attractiveness to farmers.

Implementation results. For the Oil Palm Subproject, the nucleus estate stood at 92% of the target establishment by early 2009. Some 6,000 ha of plantable land had been given to OPUL and 5,600 ha had been planted with oil palm. Plantation infrastructure and a workforce of about 1,500 were in place. The oil extraction mill on the island was still under construction. The refinery at Jinja was already operating on the basis of imported crude palm oil.

KOPGT became operational in June 2006 and has performed an important role in organizing farmers’ participation in the project, providing loans for plantation establishment and extension advice, and generally mediating the interests of the farmers, OPUL and the Government. However, the pace of smallholder mobilization is far below target. Only 66% of the expected 3,500 ha has been registered and surveyed for planting and only 33% has been planted. In particular, the target for out growers is much below that of the smallholders.3

Due to the controversy surrounding the potential environmental impact of the oil palm subproject, a detailed environmental management plan was put in place and has been monitored closely. Oil palm research activities have taken place as planned but could have been better implemented. The Government complied with its commitments to provide or improve key public infrastructure, including a new ferry, which has greatly increased commercial activity on the island.

The Traditional Oilseeds Subproject was remarkably successful in promoting sunflower growing across a wide geographic area, which stimulated growth in input dealing and milling. The number of beneficiaries supported by VODP expanded from about 5,000 in 1998/99 to 206,000 in 2007/08, amongst which 39% were women. Shortages of oilseeds were somewhat eased by the testing and release of new varieties by the research institutes and by the process of seed multiplication and distribution by the Uganda Oil Seeds Producers and Processors Association (UOSPA). Farmers’ reluctance to grow sunflower because of concerns about reduced soil fertility and lack of market demand were overcome through general extension and support provided by the DAOs. The area planted with VODP support rose from some 2,000 ha in 1998/99 to 81,500 in 2007/08. Moreover, the yields per ha planted also increased.

Despite this impressive performance, the Evaluation has raised two concerns. First, seed shortage continues to be a problem, a situation that could have been affected by the project’s initial policy of free seed distribution and slow progress by the research institutes with the development of




local open-pollinated varieties of sunflower seed. Second, there appears to have been a decline in extension activity in recent years despite a continuing need for services, possibly because of institutional changes in the DAO offices.

Substantial progress was made in screening and identifying potential essential oil crops and piloting commercial development on farmers’ land. The most successful crop was citronella, which is now grown, processed and sold by almost 800 farmers. However, bottlenecks emerged in the distilling and marketing processes that would impede large scale production at the present time.

Relevance, effectiveness and efficiency

Relevance. The project has high policy relevance to the Government of Uganda and IFAD, high relevance to the private sector (directly in the case of oil palm and indirectly in that of traditional oilseeds), and high relevance to the needs of the rural poor (especially in the poorer, war-torn northern region). The broad subsectoral approach raised the political and economic profile of the vegetable oil subsector and promoted knowledge synergies between the various subprojects. However, it implied a formidable task of coordination that might not have been possible had the Oil Palm Subproject not been delayed for many years. The task of planning, implementation and monitoring of the three subprojects would have been considerably eased with a clearer project structure and better specification of indicators and targets.

Effectiveness. The effectiveness of the Oil Palm Subproject has been greatest where it has been under the control of the private sector partner, i.e. on the nucleus estate and the refinery, but less effective in meeting the targets for smallholder and out grower plantings. On the other hand, positive results have been obtained with regard to the establishment of KOPGT and the environmental monitoring system.

The Traditional Oilseeds Subproject has been remarkably effective, despite intermittent problems of insurgency and bad weather. The number of beneficiaries far exceeds the original target of 60,000 households and the increase in the area planted with sunflower has been spectacular, despite fluctuations during some years. The project realized significant achievements in all its outputs and it had a catalytic role in encouraging oilseed production, processing and milling by other actors. These achievements could have been even greater with more applied research on soil fertility and new sunflower varieties, more encouragement of private seed suppliers, and a more sustained and deepened extension effort in recent years. Notwithstanding these reservations, the effectiveness of this subproject is outstanding.

The Essential Oils Subproject achieved its aim of verifying the potential for a range of essential oil crops in terms of their oil content, yield, and vulnerability to disease, agronomy and commercial prospects. The scope for expanding cultivation of some of these crops was identified provided that certain bottlenecks are addressed. The subproject has demonstrated that under the right conditions, some of these high value crops could offer impressive returns to farmers in poor agro-ecological conditions.




Overall, the outstanding performance of the Traditional Oilseeds Subproject outweighs the delayed effectiveness of the Oil Palm Subproject and the small-scale results of the Essential Oils Subproject.

Efficiency. The cost per beneficiary varies greatly between subprojects due to the different scale of the investment overheads, the implementation strategy adopted and the speed of beneficiary participation. The costs per beneficiary for the different subprojects are: US$7,923 (oil palm), US$37 (traditional oilseeds) and US$575 (essential oils). In general, project efficiency has been affected by the delay in the Oil Palm Subproject, the splitting of the districts in the traditional oilseeds area and delays in procurement. However, these inefficiencies have been somewhat offset by the efficiency of the small project management unit.

Project impact

Rural poverty impact

Oil palm subproject. The anticipated impact on the incomes of participating farmers is be realized since harvesting of the ffbs commenced in year (2009). So far, the main impacts have consisted of changes in land use and the introduction of a new crop, farmers’ improved land rights, access to KOPGT loans, and empowerment through their newly formed unit and block committees and membership of KOPGT. Nucleus estate workers have benefited from employment, wages, housing, subsidized food, free health care and social security.

There have been some wider indirect effects of the project – both positive and negative – although it is difficult to assess their extent. Moreover, they are the product of other changes which were already going on in the island due to the growth of fishing. Positive impacts have included an increase in population, improved transport, utilities, increased business, tourism and trade, better access to financial and government services, and increased investment in housing. Negative impacts include increased pressure on education and health services, reduced access to forest resources, increased road hazards, and anti-social behavior associated with the nucleus estate workers. Overall, the positive impacts outweigh the negative ones but in any case, the effects seem to be small.

Traditional oilseeds subproject. The Traditional Oilseeds Subproject has had substantial rural poverty impact on all the impact domains. Farmers have been able to add to their household and farm assets and invest in human capital. Agricultural production and food security have improved and their capacity to manage their own economic affairs has improved through farmer organization. Environmental impacts are negligible in the short run. The various implementing partners are now giving vegetable oil crops higher priority. Other actors in the sunflower value chain have benefited indirectly, thereby improving overall market efficiency and linkage.

Essential oils subproject. Impacts on participating farmers are not expected to be widespread at this early stage of development. However, the citronella farmers have realized similar benefits to the oilseed farmers, with visible improvements in housing, farm investments and empowerment through local groups and links to broader producer organizations. There are, however, some concerns about the environmental impact of the distilleries.




Goal level impacts. The goals of the project were to increase: national production of vegetable oil crops (sunflower in particular), domestic vegetable oil consumption; import substitution of vegetable oils, and rural poverty reduction.4 The macro-analysis showed that there was a general increase in sunflower production during the project period and an increase in household consumption of cooking oil, particularly in the VODP districts. There was evidence of improvements in living standards in the VODP districts, but the poverty headcount figure (proportion of households below the poverty line) actually increased because of wider contextual factors such as adverse weather and insecurity. VODP’s contribution to poverty reduction was therefore likely to have been quite locally-specific. Because of data deficiencies it was not possible to assess the extent of domestic demand, production and import substitution of vegetable oils in Uganda.

Innovation and sustainability

Innovation. The Oil Palm Subproject is the first major PPP in Uganda and is also the first for IFAD. It has pioneered new forms of cooperation between the private sector, local and national government and farmer organizations. The PPP brought a major new investor to the country. Although the plantation mode of production is widely practiced in other countries, it is new to Uganda. The structure and functions of KOPGT are also very innovative, particularly the mechanisms for protecting farmers’ interests vis-à-vis the nucleus estate.The type of project intervention in the Traditional Oilseeds Subproject drew on tried and tested approaches to increasing agricultural production through improved seed supply, farmer extension and cottage processing. A particular innovation was the incorporation of a component on the development of food standards. Also novel – at least to Uganda – was situating these activities within a more integrated subsectoral approach. The subproject’s main strength was in replicating and scaling up the approach to a large geographical area. Its ability to do this rested primarily on the strategy of working through local government structures that had the mandate, if not the resources, to cover a large number of districts. Further up scaling is now in the hands of the private sector.

The development of niche markets of high value essential oil crops for poor farmers was very innovative. There is little cultivation of essential oil crops in Uganda and most essential oils used by industry are imported. Specialized knowledge and contacts with international markets are only now being developed as a result of the project.

Sustainability. The overall sustainability of the Oil Palm Subproject depends on that of the private investor, on whom the harvesting, processing and eventual sale of the palm oil depends. Its commitment and sustainability are underpinned by the heavy financial investment so far incurred (some US$75 million), supported by well-functioning forward market linkages already established on the basis of the sale of refined (imported) crude palm oil. The sustainability of out grower and smallholder participation in the project will hinge on the level of benefits realized through the ffb harvests and there is every prospect that the harvests will be successful. However, their participation will also require continued extension advice to smallholders and improved trust and cooperation between out growers and OPUL. The sustainability of the subproject also depends on a continued future for KOPGT, which is currently not financially sustainable without donor funding.




The sustainability of the Traditional Oilseed Subproject’s main output – sunflower production – hinges on the efficiency of the value chain, which will ensure a continuing demand for the product at reasonable levels of profitability for all stakeholders. These efficiencies have improved during the project period, not least because of the increased output from farmers, although some weaknesses remain. Nevertheless, sunflower production is likely to be sustainable into the medium term. In the longer term, however, declining soil fertility may threaten its sustainability.

The sustainability of the work on essential oil crops depends on converting the knowledge generated by the research into commercial opportunities for farmers. Crops such as citronella are suitable for development and the farmers are keen to pursue these opportunities. However, the distilling process does not appear to be environmentally sustainable and although a potential market has been identified, regular orders have not yet been established. Currently the subproject depends on a single implementing partner, whose funding is totally reliant on external funding and is precarious.

Bidco Uganda Limited

Believing that Africa has a competitive advantage in agro - business, Bidco Uganda Limited and its Joint Venture partners ventured into achieving this edge by operation on a soil to Pan principal, with its production systems starting with the farmers and ending with the consumer.

In pursuit of this, Oil Palm Uganda Limited signed an agreement with the Uganda Government to undertake an integrated palm oil project in Kalangala District of Uganda in 2002. Kalangala Oil Palm project was and still part of the Ugandan Government Vegetable Oil Development Project (VODP) initiative geared towards increasing Vegetable oil production in Uganda. The project is supported by IFAD and the World Bank with Bidco Uganda Limited and Wilmar Plantations playing a major role as the private investors.

The Bidco Uganda Limited Complex in Jinja was built in a record of 10 months and officially launched in October 2005 and has since been producing high quality products that have been very well accepted in both the local and export markets.

Bidco Uganda Limited is a Joint Venture Project with other leading and distinguished companies, each a leader in their line of business and all sharing the same vision of world class operations.

Bidco Uganda Limited firmly believes that Uganda's strength lies in agriculture and its agro based industries. It is from this perspective that oil Palm Uganda Limited undertook the Kalangala Oil Palm project.

The Bidco Uganda Limited Complex has been conceived, designed and maintained as an environment friendly organization.




Oil Palm Uganda

Tapping into a gold Mine

The Oil Palm is a highly productive source of Oil. For the reason, it has become the prime source of Vegetable oil for many tropical countries and constitutes thirty four percent of total edible oil production worldwide. Some of its varieties are even being considered for bio diesel in different parts of the world. As a result of the world's rising population and improving economic conditions among the developing countries, there is an increasing global demand for edible oils and fats.

The Kalangala Oil Palm Project is an avenue for Uganda to tap into this growing market. Oil Plans have an economic life of an average 28 years. Oil Palm Uganda's objective is that over this period, Uganda will achieve self sufficiency in palm oil production. World class plantation management practices are being utilized to ensure a high yield of quality oil all year round.




Our Purpose, Goals, and Values

Our Purpose (Why Bidco Exists)

BIDCO exists to serve daily consumer needs to enhance happy healthy living by Branding, Transforming, Distributing the goodness of Mother Nature.

Bidco's Goal - Big Heavy Audacious Goal (BHAG)

To Grab, Grow and Sustain the number one market share in the African Markets by 2013.

Our Corporate Values

Our products, processes and services will always reflect:

Our customers' needs

Excellence Quality with a price advantage Environment friendliness Welfare of the community

Our People

Will seek opportunities and overcome challenges ethically, and strive to make them a reality. INTEGRITY is what all our people value and uphold ruthlessly which enables TRUST leading to EMPOWERMENT.

Our Organization

Is committed to continual renewal so that individuals, organizational structure, products, facilities, systems and our partnerships remain dynamic.

The Bidco Environment

We believe there is always a better way. BIDCO is a place where ideas win. At BIDCO people flourish and grow. We uphold respect for the individual At BIDCO. The excitement of our employees work life is transferred to their whole life.

Corporate Philosophy

Good Corporate Governance and best management practices and policies. Value based approach provides strong foundation for growth. Empowered Working Environment. Focused Approach.




Foresee and Lead "CHANGE". There is Always "A Better Way To Do Things". Use technology to have an edge over competition. Human Resource is the only sustainable competitive advantage. "Soil to Pan" full value chain to enhance farm income & economic growth.

In general, the actual or potential benefits from traditional oilseeds and oil palm are sustainable. However, there are doubts about the financial sustainability of KOPGT on which the sustainability of smallholder oil palm production will still depend in the short run. There are also doubts about the long run sustainability of sunflower production, and the R&D of essential oil crops is Benefits for man at the Roots

The Kalangala Oil Palm project is not only an investment towards Uganda's economy, but an opportunity to immensely improve the quality of life on the Island. So far, 1200 workers have been recruited; including local university graduates and a community has been created, completed with housing and a recreational area.

Oil Palm Uganda Limited and its partners in the projects have invested in social infrastructure. The Roads are now passable all year round and the water points can be accessed with ease. Other forms of Infrastructure and services are in the pipeline including electricity, schools, religious and medical centers.

The long term benefits to the economy of Uganda will be massive. Initially, the economy will save in excess of $ 75 million annually, money now used to import crude edible oil from abroad. On completion, Uganda may also become a net exporter of refined palm oil. The economy will also benefit from the transfer of technology and skills.

OPUL is doing this in a sustainable and environmentally friendly way. We are using zero unborn technique in our plantation, ensuring that we improve the soil organic matter and fertility. To provide cover to newly cleared land and to control soil erosion, we have planted leguminous




cover crops which also add nitrogen into the soil. This in addition to a well managed forest cover in the areas initially grassland, is of positive environmental benefits.

Through this project, Oil Pam Uganda Ltd aspires to provide the people of Kalangala District with a great opportunity to immensely improve their quality of life. The development plan for this project is tailored to provide wide range of social benefits to the local community, some of which we have already started implementing. We have, for example, started construction and maintenance of roads, set up a clinic and housing for our employees. not currently sustainable without external funding.

Partner performance

IFAD. IFAD’s performance in developing and supporting the project, especially during the difficult times, was highly appreciated by the Government. IFAD helped to strengthen the pro poor focus of the project at various stages in its development; it strengthened project implementation through increased involvement in the supervision process and by providing extra staff training on gender mainstreaming and M&E. The project has also benefited from in-country support from the IFAD Field Presence Officer.

Government of Uganda. There is strong ownership of and commitment to the project at all levels of government, especially for the Oil Palm Subproject. Despite the opposition of vested interests and adverse publicity, senior officials have played a major role in pushing the project forward. The performance of the PCO has been highly commendable given the task of coordinating three subprojects with a small staff. However, the Government procedures have caused delays in project implementation and procurement, which reduced its overall effectiveness and efficiency.

Cooperating institutions. The World Bank was strongly involved in the design of the project and was cooperating institution from the start until August 2004.5 It played a key role in facilitating negotiations between the Government and the private investor. UNOPS took over in September 2004 and fulfilled its supervisory role effectively. Both institutions made important contributions to project supervision, although they focused primarily on the Oil Palm Subproject and gave very little attention to the Essential Oils Subproject.

Private sector partner (BIDCO, OPUL). The private sector partner has demonstrated high commitment to the realization of the Oil Palm Subproject and extraordinary patience with the Government over the negotiation of the agreement and the slow pace of land acquisition. Its commitment is reflected in the size of the investment to date and the speed of its implementation. On Bugala Island, OPUL has shown flexibility in adjusting to local conditions and has developed excellent relations with KOPGT and the local government.




BIDCO PRODUCTS

Bidco Brands - Fats

Kimbo

Kimbo is a pure white vegetable fat, loaded with Vitamins. It is suitable for all purpose home cooking and industrial frying e.g. baking, general cooking, shallow frying and direct creaming and icing in bakeries.




Cowboy

Cowboy is the only flavored cooking fat available. It is made from all natural vegetable ingredients and is also cholesterol free. Cowboy has been used for years and is ideal for frying chapattis and matooke. It adds taste to cooking and gives it a mouthwatering aroma.

Chipsy Plus 3

Made from all natural vegetable products, Chipsy is cholesterol free and hence a healthy choice for your family. It is recommended for baking, all home cooking and industrial frying. It was the first Yellow cooking fat in East and Central Africa and has become a market leader in the region.

CHIPO

CHIPO is a healthy ingredient for all home cooking. It is suitable for baking, industrial frying and is used directly for creaming and icing in bakeries.




Bidco Brands - Oils

Elianto

Bidco Elianto is 100% pure and refined corn oil, Purified through BIDCO's unique winterization processes. Produced to the highest international standards, Elianto has enjoyed over 25 years of customer loyalty, and has become East Africa's number one selling corn oil.

Why use Elianto

1. Clear light oil, remains clear even when refrigerated.2. Healthy polyunsaturated oil.3. Extracted from the finest corn seed.4. Food cooked with Elianto lasts fresh longer.

Elianto is a nutritious all purpose cooking oil for a busy household.




Golden Fry

This 100% triple refined vegetable Oil is one of the most competitive oils in East and Central Africa. It is economical and has superior frying performance for both deep and shallow frying. Golden fry, lasts longer.... fries more.

Why use Golden Fry

1. It is made purely from vegetable oil2. Contains natural Vitamin E.3. Medically proven to lower total blood cholesterol levels4. Does not smoke or burn, has a long shelf life and can be used for repeated frying.5. Food fried in Golen fry lasts fresher longer as it has a very high oxidative stability6. Enhances the natural flavors of food.7. Suitable for deep frying because it has moderate linoleic acid content and a high level of

natural oxidants.




Fortune Cooking Oil

This 100% triple refined vegetable Oil is one of the most competitive oils in East and Central Africa. It is economical and has superior frying performance for both deep and shallow frying.

Why use Fortune Cooking Oil


natural oxidants.

Sun Gold

This light sparkling Sunflower oil is made purely from the best East Africa Sunflower seeds. It is the healthiest alternative for an active modern family.

Why use Sun Gold

1. Food cooked with Sun Gold will absorb less oil2. Sun Gold Contains unsaturated fatty acids, which are good for heart disease prevention3. Rich in Vitamin E

Sun Gold is the ideal all purpose cooking oil for those who are health conscious.




Fortune Butto

There is pure, healthy, nourishing and affordable vegetable cooking oil. It is available in sachets and can be found in any outlet.

Why use Fortune Butto

1. Contains natural Vitamin E.2. It is made purely from vegetable oil3. Does not smoke or burn and can be used for repeated frying.4. Enhances the natural flavors of food.5. Suitable for deep frying.

Fortune Butto is available in 50 ml, 100 ml, 200 ml, 500 ml and 1 Litre sachets.




Ufuta

This pure vegetable oil is the most economical alternative for all frying purposes and general household cooking.

Why use Ufuta

1. Helps in controlling cholesterol levels as it is high polyunsaturated and low in saturates2. A rich natural source of Vitamin E.3. Competitively priced and more economical than any other cooking oil.

Bidco Brands - Soaps & Detergents

Star Range/Bull Range/Kuku Range

They are effective for washing dirty laundry, removing stubborn stains such as those of grease, fruit, grass and alcohol, cleaning kitchens tops, floors, and vehicles as well as bathing.

Why use Star Washing Bars

1. Make clothes brighter and softer2. Totally hygienic and non -allergic3. Long lasting and economical4. Removes stains5. Easy to lather with our hard scrubbing6. Gentle on skin7. Fragranced to leave laundry smelling fresh.




Gental Washing Powder

Gentle washing powder contains active organic matter and stainex enzymes which penetrates stains and digest the dirt to yield effective cleaning and brightening action.

Why use Gental Washing Powder

1. It gets rid of stains fast2. Lathers easily3. It’s in various sizes and at the respective prices, allowing customers to purchase

according to their needs and ability.

Bidco Brands - Margarines




Gold Band Margarine

BIDCO Gold Band is the perfect household margarine. It can be used for making sandwiches and spreads, baking, pan frying, sauce making, and as a topping on posho, beans and porridge.

Why use Gold Band Margarine

1. It has a delicious buttery flavor2. Spreads smoothly and easily3. Can be stored without refrigeration4. Is enriched with Vitamins A, B1, B2, D and E

Bidco Brands - Baking Powder

Mariandazi Baking Powder

Mariandazi baking powder is a fine white odorless powder specially designed to make dough rise and become light as it bakes. The Mariandazi formula controls release of carbon dioxide in two stages; first when the dough is being prepared and then during baking, ensuring a smooth texture.

Mariandazi is effective and suitable for all baking application.




Bidco Brands - Fats

Kimbo

Kimbo is a pure white vegetable fat, loaded with Vitamins. It is suitable for all purpose home cooking and industrial frying e.g. baking, general cooking, shallow frying and direct creaming and icing in bakeries.

Cowboy

Cowboy is the only flavored cooking fat available. It is made from all natural vegetable ingredients and is also cholesterol free. Cowboy has been used for years and is ideal for frying chapattis and matoke. It adds taste to cooking and gives it a mouthwatering aroma.




Chipsy Plus 3

Made from all natural vegetable products, Chipsy is cholesterol free and hence a healthy choice for your family. It is recommended for baking, all home cooking and industrial frying. It was the first Yellow cooking fat in East and Central Africa and has become a market leader in the region.

Chipo

CHIPO is a healthy ingredient for all home cooking. It is suitable for baking, industrial frying and is used directly for creaming and icing in bakeries




Bidco Brands - Oils

Elianto

Bidco Elianto is 100% pure and refined corn oil, Purified through BIDCO's unique winterization processes. Produced to the highest international standards, Elianto has enjoyed over 25 years of customer loyalty, and has become East Africa's number one selling corn oil.

Why use Elianto

5. Clear light oil, remains clear even when refrigerated.6. Healthy polyunsaturated oil.7. Extracted from the finest corn seed.8. Food cooked with Elianto lasts fresh longer.

Elianto is a nutritious all purpose cooking oil for a busy household.




Golden Fry

This 100% triple refined vegetable Oil is one of the most competitive oils in East and Central Africa. It is economical and has superior frying performance for both deep and shallow frying. Golden fry, lasts longer.... fries more.

Why use Golden Fry


natural oxidants.




Fortune Cooking Oil

This 100% triple refined vegetable Oil is one of the most competitive oils in East and Central Africa. It is economical and has superior frying performance for both deep and shallow frying.

Why use Fortune Cooking Oil


natural oxidants.

Sun Gold

This light sparkling Sunflower oil is made purely from the best East Africa Sunflower seeds. It is the healthiest alternative for an active modern family.

Why use Sun Gold

4. Food cooked with Sun Gold will absorb less oil5. Sun Gold Contains unsaturated fatty acids, which are good for heart disease prevention6. Rich in Vitamin E

Sun Gold is the ideal all purpose cooking oil for those who are health conscious.




Fortune Butto

There is pure, healthy, nourishing and affordable vegetable cooking oil. It is available in sachets and can be found in any outlet.

Why use Fortune Butto

6. Contains natural Vitamin E.7. It is made purely from vegetable oil8. Does not smoke or burn and can be used for repeated frying.9. Enhances the natural flavors of food.10. Suitable for deep frying.

Fortune Butto is available in 50 ml, 100 ml, 200 ml, 500 ml and 1 Litre sachets.




Ufuta

This pure vegetable oil is the most economical alternative for all frying purposes and general household cooking.

Why use Ufuta

4. Helps in controlling cholesterol levels as it is high polyunsaturates and low in saturates5. A rich natural source of Vitamin E.6. Competitively priced and more economical than any other cooking oil.

Bidco Brands - Soaps & Detergents

Star Range/Bull Range/Kuku Range

They are effective for washing dirty laundry, removing stubborn stains such as those of grease, fruit, grass and alcohol, cleaning kitchens tops, floors, and vehicles as well as bathing.

Why use Star Washing Bars

8. Make clothes brighter and softer9. Totally hygienic and non -allergic10. Long lasting and economical11. Removes stains12. Easy to lather with our hard scrubbing13. Gentle on skin14. Fragranced to leave laundry smelling fresh.




Gental Washing Powder

Gentle washing powder contains active organic matter and stainex enzymes which penetrates stains and digest the dirt to yield effective cleaning and brightening action.

Why use Gental Washing Powder

4. It gets rid of stains fast5. Lathers easily6. It’s in various sizes and at the respective prices, allowing customers to purchase

according to their needs and ability.

Gold Band Margarine

BIDCO Gold Band is the perfect household margarine. It can be used for making sandwiches and spreads, baking, pan frying, sauce making, and as a topping on posho, beans and porridge.

Why use Gold Band Margarine

5. It has a delicious buttery flavor6. Spreads smoothly and easily7. Can be stored without refrigeration8. Is enriched with Vitamins A, B1, B2, D and E




Social Impact and Responsibility

Our project is the largest among agro-projects in the country in recent years. The value of total investment is expected to be US$ 150m in eight years. We started the project in 2004 and so far we have invested about 70 million dollars (about Shs 126 bn) and the investment would have been much more by now, had we received all the land as stated in our agreement with the Government of Uganda.

There has been a delay to provide the required land. So far we have received 6,500 hectares only, against a total area of 26,500 hectares to be provided. Out of the land received 1,500-2,000 hectares have to be left on the shoreline.




Environmental Impact

BIDCO certainly undertakes high levels of manufacturing. What is the company's environmental policy?

BIDCO is firmly committed to the implementation of an environmental management system that will lead to sustainable development and will advance positive impacts on both human health and the environment. In light of this the company has integrated environmental conservation in all its procedures and practices right from the soil to pan.

From the soil of Kalangala Island, BIDCO is creating the largest oil palm plantation in Africa which will eventually cover over 40,000 ha of plantation. The first phase of the plantation is already underway and more than 6,000 ha of land has already been prepared. Transplanting of over 800,000 high oil bearing oil palm trees is underway. BIDCO's plantation on Kalangala Island adheres strictly to Best Agricultural Practices. These practices range from, a forestation, fertilizer application, spraying against pests, irrigation, prevention of soil erosion through the growing of cover crops.

BIDCO appreciates the importance of trees in the battle against climate change. This explains why the company has placed great emphasis on tree planting both within and out of its premises. BIDCO has spearheaded on Kalangala Island the replanting of trees next to the lake. This project is being undertaken in partnership with the local government and surrounding communities. The response from stakeholders has been impressive. At the factory premises trees dot the green landscape and a forest plantation has been established.

In adopting sound agricultural practices, BIDCO conforms strictly to controlled application of fertilizer. This is made possible by a series of measures, e.g. the use of nurseries where fertilizer is restricted to the individual palm. Indeed, even where the palms have been transferred from the nursery to the plantation, the field staffs are trained in restricted fertilizer application. This ensures that there is no danger of any run-off.

BIDCO applies sprinkler irrigation in a bid to control the use of water and apply the water directly on the palms. There is absolutely no wastage of water or any run-off. This is a clear instance of environmental conservation.

Spraying of chemicals against pests is also undertaken in a professional and controlled method. The staffs are clad in protective gear from head to foot and the application is done under strict professional supervision. This approach has a double advantage. The staff health and occupational safety is assured and the environment is conserved. BIDCO appreciates the ravages of soil erosion such as loss of fertility. This explains why the company places emphasis on the growing of cover crops, which add both moisture and important nutrients such as nitrogen to the soil.

The rigorous environmental conservation efforts are beginning to bear fruit. A review of the rainfall patterns on Kalangala Island reveal an interesting trend. Over the last three years there has been an increase in rainfall on the island. This rewarding micro-climate is testimony to the




fact that the conservation efforts spearheaded by BIDCO are contributing to positive environmental changes.

Environmental conservation is also keenly attended to at BIDCO's Jinja premises. The company has designed an elaborate Effluent Treatment Plant along with a Sewerage Treatment Plant. The Effluent Treatment Plant ensures that any discharge from the plant is treated and rendered harmless.

Effluent water is defined as water discharged from industry which contains soluble materials that are injurious to the environment. Such soluble materials may be gases halogens or soluble liquids or solids which contain ions of either organic or inorganic origin.

Thus, the major objective of BIDCO's industrial effluents treatment is to reduce the amount of these potentially toxic compounds to their acceptable Threshold Limit Value (TLV), according to standards of the World Health Organization and the National Environmental Management Authority (NEMA). BIDCO's effluent treatment consists of acidification ponds, an anaerobic digestion tank and an aeration tank. The liquid is aerated according to international standards before it is discharged harmlessly.

BIDCO also handless sewage treatment accordingly to laid out standards set by the National Environment Management Authority (NEMA) and also based on international standards. The objective of sewage treatment is to produce a disposable effluent without causing harm or trouble to the communities and prevent pollution.

BIDCO has constructed a wetland for sewage treatment which provides a high degree of aerobic biological improvement and used to ensure that the effluent is harmless through removal of excess nutrients that may have adverse consequences on the environment. BIDCO's constructed wetland is teeming with aquatic and birdlife, testimony to the harmless nature of the treated sewage.

There has been a delay to provide the required land. So far we have received 6,500 hectares only, against a total area of 26,500 hectares to be provided. Out of the land received 1,500-2,000 hectares have to be left on the shoreline.




Technology Processes / Procurement process.

BIDCO Uganda Ltd. is the only company of its kind in the region to have a fully integrated enterprise resource planning (ERP) and intelligence resource planning (IRP) systems. BIDCO was the first company in the sector to venture into electronic commerce and the first to network all its multi-location facilities, through V-Sat and the Internet.

Enterprise resource planning systems can be defined as customizable, standard application software which includes integrated business solutions for the core processes and administrative functions (Chan & Rosemann, 2001). From an operative perspective, ERP systems provide a common technological platform unique for the entire corporation allowing the replacement of mainframes and legacy systems.

This common platform serves to process automation as well as to simplify current process either by an explicit reengineering process or by the implicit adoption of the system “best practices. Finally, the common centralized platform allows the access to data that previously were physically or logically dispersed.

The automation of the processes and the access to data allows the reduction of operating times (thus reducing operating costs) while the latter serves to a better support of business decisions.

ERP is considered to provide businesses with new opportunities to acquire knowledge being the sources of knowledge the aforementioned best practices from the ERP, and the ERP software company’s staff during the implementation phase. At present, ERP systems are either used or implemented in a large number of enterprises.

The adoption of an ERP system with operational objectives is aimed at improvement operating efficiency together with the reduction of costs, while companies implementing ERP with a strategic objective would experience a change in business processes, improving sales and market expansion. A widespread critique to ERP systems is their high total cost of ownership and hidden costs in implementation. Besides, ERP systems impose their own logic on an organization’s strategy and culture, so ERP adopters must adapt their business processes and organization to these models and rules.

BIDCO's modern refinery produces palm oil to international standards. It has mechanical and automated handling systems that operate continuously. Bio-mass powered boilers that produce superheated steam, used to generate electricity through turbine generators. The lower pressure steam from the turbine is used for heating purposes throughout the factory. Upon refining, the oil is separated or fractionated into liquid and solid phases by thermo-mechanical means and the liquid fraction also known as olein is extracted, which is used extensively as a liquid cooking oil. Furthermore, Vitamins are added and the products are fortified to ensure the consumer benefits to the optimum. BIDCO's processing operations are automatically controlled and routine sampling and analysis by process control laboratories support smooth and efficient operations.




BIDCO's laboratory ensures that key tests are conducted appropriately. Today BIDCO's laboratory possesses state of the art equipment such as the Near Infra Red System, which tests moisture content of the oil, while simultaneously undertaking a myriad of other tests. This makes certain accuracy, in all processes a merit passed on to the consumer under the Soil to Pan Philosophy.

Institutions and households have access to high quality brands such as Kimbo, Cow Boy, Ufuta, Golden Fry and the uniquely Ugandan product Fortune Brand. The Uganda National Bureau of Standards fully recognizes BIDCO products.

Illustration of ERP:

Figure .1

Enterprise Resource Planning, also known as ERP integrates all departments and functions across a company onto a single computer system that meets company needs. Enterprise resource planning is becoming a business tool more companies are employing to help them manage resources and information.

An integrated enterprise resource planning approach will have a tremendous financial and time savings if the organization installs the ERP software correctly.



http://www.enterpriseresourceplanning.com/what-is-enterprise-resource-planning.html

http://www.enterpriseresourceplanning.com/what-is-enterprise-resource-planning.html


Here is an ERP example: Without ERP, a customer places an order, that order begins an order taker creating a mostly paper-based journey from sales to billing to shipping. Frequently, company employees have to re-enter data about that order at the various stops. This inefficiency leads to time delays, input errors and higher labor costs. A fully integrated ERP system allows all departments’ access to the order and coordinates the process at each step along the way.

No matter how big or small your business is, you need help managing the information you have and the information you gather each day. By using ERP software, you can streamline the way departments speak with each other, while also helping with customer communication and orders.

There are many benefits to enterprise resource planning, including the ease of implementation and the ability to customize the software for your needs. By adding the ERP software to your company in phases, you can also enhance the function of your business without interrupting your schedule.

The wave of the future is enterprise resource planning - and you can't afford to not dip your toes in the water. Your competition already has.

Using ERP in business is crucial when you have large amounts of information that needs to be accessed on demand. Enterprise resource planning software works for businesses of all sizes. While this system may seem to be suited for those businesses with larger employee rolls and million dollar profits, the smaller business can learn a thing or two about business and information management with ERP. Areas Where Enterprise Resource Planning Helps

No matter what business you are in or what market you compete in, there are several categories in which enterprise resource planning will help:

Human resources Customer relationships Data Manufacturing and supply chain Finances Project management

Within each of these areas are volumes of information that need to be organized and easily accessible. For example, if you want to hire someone, you need to be able to access the training systems, payroll system, time keeping software, etc. By using enterprise resource planning, you will be able to handle each new employee with ease, managing them from the time they begin work to the time they resign or retire.



http://www.enterpriseresourceplanning.com/using-erp-in-business.html


Logistics supply chain and marketing of BIDCO Oil Company.

Logistics is the function responsible for all aspects of the movement and storage of materials on their journey from original suppliers through to final customers. Every organization has to move materials. Manufacturers have factories that collect raw materials from suppliers and deliver finished goods to customers, Every time you buy, rent, lease, hire or borrow anything at all, someone has to collect it and deliver it to your door. Logistics is the function responsible for this movement.All aspects of the movement and storage of materials on their journey from the producers the final consumers is logistics.

Bidco moves products (palm oils) from Kalangala plantations to masese jinja where the production factory is located. Products from different out growers are all collected and integrated together for a single transit to the production area.

The flow of products from Kalangala, Bulaga islands and other places of the plantations to the main land factory is done by waters means. The boats, ferry from Kalanga Island to masese landing site deliver oil palms to the main land at masese were off loading of the boats and loading the transit tracks takes place for the final delivery of the products for the production and extraction of final products takes place. Here the inward logistical activities are mainly done by company boats which transfer the materials from the plantations to the mainland in Jinja production plant where processing of materials to finished goods take place. At the heart of an organization are the operations that create and deliver the products. These operations take a variety of inputs and convert them into desired Operations all the activities that create an organization’s products.Outputs, as shown in Figure 1.2. The inputs include raw materials, components, people, equipment, information, money and other resources. Operations are the manufacturing, serving, transporting, selling, and training, and so on. The main outputs are goods and services. Figure 1.2

Input operations out put

Operations transform in puts into desirable goods.



Oil palms ___ Masese ____ Market

• People

• Buildings

• Raw materials

• Equipment

• Information

• Investment

• etc.

• Manufacture

• Serve

• Supply

• Transport

• Sell

• Train

• etc.

.Goods

.Services

.Profit

.Waste •

.Wages

.etc.


Figure .1.3. LOGISTICAL FLOW OF MATERIALS FROM KALANGALA TO MASESE JINJA FACTORY




Figure 1.3. An overview of BIDCO supplies chain.

Kalangala plantations BIDCO Masese Market

BIDCO extracts vegetable cooking oils from palm oils. They maintain their steady supply of oils throughout the years from there plantations on Kalangala islands and from there out growers who provides supplementary palms for a steady flow of supply of products on the market. The movement of materials from the islands is a more complex process as much is needed to ensure both safety and steady flow of materials.

Looking at the flow of products to Masese for production process, we also consider the flow of products from Masese to the market. When the production is done and the final goods are extracted, there arises need for the logistical works to supply goods to the final markets. However they are also moved to ware houses, and other storage facilities which support the supply with the demand on the market.

Tracks owned by the company transports goods to their alternative distribution centers’ and market places.

We have outlined the role of logistics in moving materials – but what exactly do we mean by materials? Sometimes this is obvious, for example, when a power station brings coal from a mine, a farmer takes potatoes to a market, or a computer manufacturer delivers PCs to a warehouse. With tangible goods it is easy to see the role of logistics, and even organizations providing the most intangible services move some goods around (perhaps paperwork or consumables).

Often the flow of materials is less clear, for example, when a television company delivers entertainment to its viewers, a telephone company provides a communications service, then



BIDCO LTD

Logistic

Logistics

Outward

LogisticsInward

Materials management

Operations within an organization Customers External

Suppliers

External


logistics includes moving both tangible and intangible goods and this might include materials, components, finished products, people, information, paperwork, messages, knowledge, consumables, energy, money, and anything else needed by operations. A television company uses logistics to transmit programmers’ to customers, in the same way that an oil company like BIDCO uses logistics to deliver oil products. The clear message is that every organization moves materials, and for this it needs logistics

Supply chains

So far we have described the movement of materials through a single organization. But no organization works in isolation, and each one acts as a customer when it buys materials from its own suppliers, and then it acts as a supplier when it delivers materials to its own customers. For instance, a wholesaler acts as a customer when buying goods from manufacturers, and then as a supplier when selling goods to retailers. A manufacturer buys raw materials from suppliers, assembles these into finished products, and sells them to wholesalers. As a result, most products move through a series of organizations as they travel between original suppliers and final customers. Palm oils moves through a farm, tracks collection, and factory, bottling plant, distributor and supermarket before we buy it. People use different names for these chains of activities and organizations. When they emphasize the operations, they refer to the process; when they emphasize marketing, they call it a logistics channel; when they look at the value added, they call it a value chain;3 when they see how customer demands.




Basic structures

Figure 1.4. Logistics and marketing structure of Bidco ltd.

First tier supplier in this regards is the plantations lands, second tier supplier is the oil palms harvested, and in this regard we can term the third tie supplier as the final products of oil making from the oil palms. Products flow from the fast tie supplier through the production process to the third tie customers who are the end users.

The distribution of these products can range from the first tie customers who are the whole sellers, the second tie customers who are can be the retailers depending on the distribution plan, and finally to the third tie customers who are the end users of the BIDCO products.




List of figures. Plantations and activities undertaken at Kalangala oil palms plantations and Masese production factory.

ACTIVITIES UNDERTAKEN AT OIL PALM PLANTATIONS.

Seedlings of the oil palms before transplanted to the main garden.

Seedlings ready for transplanting.




Sorting of oil palms by hand means.




1. While at Kalangala plantations.




Palm oil trees taken by a phone camera.

Taking notice of the plantations at Kalangala.




During site survey while at Kalangala palm oil plantations.

Site inspection: In Kalangala plantations.




Looking at the proximity of the island location.




Taking refreshment from a long sunny day.

Conclusions and recommendations 6

Conclusions

VODP is a high profile project because of the novelty of the PPP, the extent of leveraged private sector financing, and the political controversies involved with the oil palm sub project. It is a highly innovative project which provides important lessons from all three subprojects regarding: the advantages and challenges of a PPP (oil palm); the potential for replication and scaling up traditional smallholder development through a value chain approach (oilseeds); and the challenges of developing niche markets for little known crops (essential oils). The project has had a synergistic effect in promoting sunflower cultivation and processing, which is evidenced not only by the large number of beneficiaries involved but also by the expansion in industrial milling and sales of vegetable oil.

At this point it is difficult to assess the achievements in the oil palm sub sector due to the long delays in start up. Thus, the potential achievements in the Oil Palm Subproject need to be assessed cautiously as they are still to be realized. While the model is innovative and supports an equitable relationship between smallholder and the private sector and the benefits to smallholder farmers are expected to be substantial, only a small number of them are currently participating. Knowledge about the requirements for developing niche markets in essential oils has grown considerably, but the impact on farmers is still small. Despite the many challenges faced and the




underestimation and poor management of project risks (related to land and the environment), the level of commitment to the project by sponsors, investors, managers and implementers is strong. There has been strong cooperation and partnership in all subprojects and at all levels.

Oil palm. The Oil Palm Subproject is now well underway and the private investor has proved to be an exceptionally good partner. The nucleus estate is 92 per cent established and the first harvests of ffbs on the nucleus estate and smallholder/out grower land are expected by early 2010. The low participation of out growers and smallholders remains a concern, but the expectation is that the numbers will increase once farmers realize cash benefits from the harvest. With two years of harvesting before project completion, it is possible that the target numbers of smallholders and out growers will be achieved. The decision to expand the nucleus estate six-fold had serious implications for its implementation. It affected the pace and cost of implementation and provoked public concerns about possible effects on the environment. These concerns provided fodder for vested interests opposed to the project, which in turn undermined potential support amongst landowners and farmers on the island. With the benefit of hindsight, the project should have explored the implications of the nucleus estate expansion earlier and in greater depth, anticipated potential land shortages and concerns by environmentalists, and proactively addressed these problems.

KOPGT. Starting from scratch, KOPGT has developed into an effective organization, providing a range of services including farmer organization, extension and loan administration. The current system is working well, with mutually reinforcing links between farmer organization, extension and credit. The financing system has been adapted to the special circumstances on the island and seems to be working well. It remains to be seen whether these loans can be recovered efficiently and the situation will need to be closely monitored after the first harvest. KOPGT will need to ensure that its accounting system can record all transactions in real time and provide individual accounting to farmers. In the short term there is a need to consolidate the gains made in establishing KOPGT and to further strengthen it. In particular, KOPGT, as a multifunctional organization will need to expand its learning, and improve its agronomic technical skills to help farmers. In addition, KOPGT will need to do this without increasing its overall cost, thus improving its operational efficiency. However, the main remaining concern is its financial sustainability, which needs to be addressed urgently.

Traditional oilseeds. There has been strong achievement with traditional oilseeds particularly given the difficulties faced due to insurgency and intemperate weather in the project area. Performance could have been even better with some small improvements. The research stations could have released improved sunflower open pollinated varieties earlier and the link between the research stations, on-farm trials and the extension work could have been stronger; the phasing out of free seed and collaboration with private seed suppliers could have been introduced earlier; higher-output oil pressing machines could have been sourced to maintain interest in cottage processing; and the extension work could have been deepened with more attention to soil fertility as well as broadened as the project progressed.

The two main lessons from this subproject are: First an integrated value chain approach – even if only partially integrated as in this case – increases the effectiveness of any one part of the chain as well as the overall set of linkages, thereby increasing profitability to all the actors. The




improvements in seed distribution and the opportunities for value addition encouraged farmers to increase their area under sunflower, which in turn stimulated more traders and millers to enter the subsector and improved market conditions generally. Second, working through the DAOs enormously scaled up project implementation and increased the number of beneficiaries. Working through UOSPA facilitated linkages to other private sector operators, especially the millers.

The NARO research institutes have fulfilled their obligations under the memorandum of understanding, but have had some challenges. The main problems were lack of sufficient financial and human resources, weak staff capacity and the low priority given to vegetable oil crops. The lesson here is that financial injections into weak research institutions are unlikely to be sustainable without assured future funding. The performance of UNBS in developing food standards for vegetable oilseeds and promoting awareness of the importance of these standards amongst producers and processors is commendable. UNBS would benefit from further resources to strengthen its work on inspection and compliance.

Subsectoral advocacy. The role envisaged for VODC in supporting the subsector outside of VODP was enlightened, if premature at the time, but raised conflicts of interest. This role has largely been taken over by OSSUP. The latter organization has wider representation than VODC and draws on considerable enthusiasm and energy from its participants. It is working towards defined objectives and targets, and is developing priorities for advocacy and policy dialogue.

Essential oils. Considerable advances were made in the R&D of different essential oil crops – which was the major objective of the project – but the piloting of processing and marketing of these crops showed that there are bottlenecks in the value chain that would need to be overcome before any commercial development could take place. Apparently there are opportunities for essential oil production in Uganda; there is a demand from industrialists (depending on quality, price, volume and regularity of supply etc.); and these high value crops could offer good returns for farmers in areas where there are few other alternatives. The main lessons from this subproject are that while R&D of new agricultural crops is necessary, it is expensive, and once trials have been undertaken on farmers’ land it is difficult to manage their expectations regarding further development. Before launching into larger scale production it is important to research the downstream linkages in order to ensure that the potential profitability of the crop can be realized. However, such market research requires specific competences and dedicated resources, and cannot be grafted on to the existing responsibilities of researchers or project staff.

1/ the rating scale is as follows: 6 (highly satisfactory); 5 (satisfactory); 4 (moderately satisfactory); 3 (moderately unsatisfactory); 2 (unsatisfactory) and 1 (highly unsatisfactory).

2/ BIDCO (BIDCO Oil Refineries Ltd (Kenya) is the main project partner. Its subsidiary OPUL (Oil Palm Uganda Ltd. was created to manage the nucleus estate on Bugala Island).

3/ Out growers land is managed in consolidated blocks by OPUL; smallholders grow and manage the oil palm plots on their own land; hence their plots are smaller and more scattered.




4/ since there are many influences on these aggregate processes besides that of the VODP, it is not possible to attribute any changes to the project alone.

5/ The World Bank withdrew as cooperating institution because it feared that the expanded oil palm project would not comply with its internal forestry safeguards policies.

6/ these conclusions and recommendations are a summary of the main conclusions and recommendations found in the full report.

Message from Managing Director

We project that, within the next five years, the total area under palm tree coverage will be about 40,000 hectares and a similar size from the out growers. The combine total of 80,000 hectares would provide a spring board for social economic transformation at the household level and will significantly reduce not only Uganda's vegetable oil import bill but also that of the entire region.

We will continue to contribute significant sums to Uganda's exchequer. Today we employ thousands of Ugandans directly and indirectly, contributing to improved livelihoods, this will be further boosted by the gradual and professional evolution of a category of out growers. It is then, that the Soil to Pan Philosophy we have adopted will show its transformative capabilities.

We will continue to be a market leader in the region. Through consistent team work, client care, environmental conservation, state-of-art-technology, effective marketing and a sound community partnership programme. We will be able to create enough processing capacity to handle all the fruits. I expect that oil palm will be very popular.



bidco company profile final doc

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