Product, Technology and Product, Technology and Enterprise Development for Food Enterprise Development for Food Value Addition and Job CreationValue Addition and Job Creation

BYBY

William Kyamuhangire, PhD.William Kyamuhangire, PhD.

Assoc. Professor, Manager, Assoc. Professor, Manager, FTBICFTBIC

MAKERERE UNIVERSITYMAKERERE UNIVERSITY

IntroductionIntroduction

Uganda’s (Africa’s) Development ChallengeUganda’s (Africa’s) Development Challenge"When we sell a kilo of bean coffee in Uganda, "When we sell a kilo of bean coffee in Uganda, we get one dollar per kilo, ... The same kilo, when we get one dollar per kilo, ... The same kilo, when it is processed [and sold in Britain], goes for $10, it is processed [and sold in Britain], goes for $10, $11 or even more a kilo. That is the same $11 or even more a kilo. That is the same situation [price disparity] that goes for all raw situation [price disparity] that goes for all raw materials.“ Museveni,materials.“ Museveni,““There are two problems that we, as a country, There are two problems that we, as a country, must solve. We must create opportunities for must solve. We must create opportunities for people to earn a living. Fast. The other is to find people to earn a living. Fast. The other is to find something of value that we, as Ugandans, take to something of value that we, as Ugandans, take to the market and sell sustainably over a long term the market and sell sustainably over a long term for a high return. “ Kabushenga, 2013.for a high return. “ Kabushenga, 2013.

Uganda’s development Uganda’s development challenges (Vision 2040)challenges (Vision 2040)

Low Competitiveness; Low Competitiveness; Weak public sector management and administration;Weak public sector management and administration;

• Lack of public institutional support Lack of public institutional support Ideological disorientation; Ideological disorientation; Low industrialisation and value addition Low industrialisation and value addition

• GDP is still largely dominated by primary products. GDP is still largely dominated by primary products. • As a result: unfavourable balance of payments, poor As a result: unfavourable balance of payments, poor

skills transfer, low levels of employment and high skills transfer, low levels of employment and high poverty levels. poverty levels.

• Low levels of Science, Technology, Engineering and Low levels of Science, Technology, Engineering and Innovation (STEI).Innovation (STEI).

Limited government investment in strategic and Limited government investment in strategic and emerging industries emerging industries

Low level of saving and inadequate revenue Low level of saving and inadequate revenue collection; collection;

What we need to doWhat we need to do Africa's ability to sustain its current growth will depend largely on how quickly it Africa's ability to sustain its current growth will depend largely on how quickly it

will be able to shift from reliance on traditional commodity markets to modern will be able to shift from reliance on traditional commodity markets to modern economic structures that focus on technology-driven development. "On the economic structures that focus on technology-driven development. "On the Wings of Innovation: Africa 2024,“Wings of Innovation: Africa 2024,“

““The real solution is investment in infrastructure, commercialising agriculture The real solution is investment in infrastructure, commercialising agriculture and expanding our industrial base.” Museveni, and expanding our industrial base.” Museveni,

As a latecomer Africa has the benefit of tapping into vast quantities of As a latecomer Africa has the benefit of tapping into vast quantities of technological knowledge available worldwide. The continent's leapfrogging into technological knowledge available worldwide. The continent's leapfrogging into the mobile revolution illustrated the power of latecomer advantages. Africa is the mobile revolution illustrated the power of latecomer advantages. Africa is now the origin of new industries such as mobile money transfer. Juma, 2012now the origin of new industries such as mobile money transfer. Juma, 2012

Universities are recognized as sources of knowledge creation, innovation and Universities are recognized as sources of knowledge creation, innovation and technological advances. Across the globe, they are being positioned as strategic technological advances. Across the globe, they are being positioned as strategic assets in innovation and economic competitiveness, and as problem-solvers for assets in innovation and economic competitiveness, and as problem-solvers for socio-economic issues affecting their countries. Sebuwufu, 2012socio-economic issues affecting their countries. Sebuwufu, 2012

Macroeconomic Strategies Macroeconomic Strategies (Vision 2040)(Vision 2040)

Realise appropriate growth in investment spending as a proportion of national Realise appropriate growth in investment spending as a proportion of national income, increase in growth of private capital and labour utilization and income, increase in growth of private capital and labour utilization and productivity. productivity.

Incentives will be provided to increase the size of the productive labour by Incentives will be provided to increase the size of the productive labour by fostering labour mobility, increase research and development activities and the fostering labour mobility, increase research and development activities and the utilization of research and innovation products. utilization of research and innovation products.

To build a stronger and more competitive industrial base To build a stronger and more competitive industrial base • i) i) developing industries that utilise the local potential, developing industries that utilise the local potential, • ii) attracting industries that can be relocated from fast emerging economies, ii) attracting industries that can be relocated from fast emerging economies, • iii) offshoring industries, iii) offshoring industries, • iv) establishing economic lifeline industries, and iv) establishing economic lifeline industries, and • v) investing in strategic industries. v) investing in strategic industries.

Emphasis will be put in the establishment of economic lifeline industries including; Emphasis will be put in the establishment of economic lifeline industries including; agro-based industries, iron and steel industry, oil and gas industry and building a agro-based industries, iron and steel industry, oil and gas industry and building a strong STEI foundation that will be a spring-board for advanced industrialisation. strong STEI foundation that will be a spring-board for advanced industrialisation.

Makerere University Strategic Makerere University Strategic Plan 2007/08-2017/18Plan 2007/08-2017/18

Strategic pillars of the UniversityStrategic pillars of the University

1.1. Teaching and LearningTeaching and Learning

2.2. Research and InnovationsResearch and Innovations

3.3. OutreachOutreach

Research and InnovationResearch and InnovationGoalsGoals

1.1. To enhance knowledge generation and access in both science and To enhance knowledge generation and access in both science and humanities disciplines with a view to repositioning Makerere University humanities disciplines with a view to repositioning Makerere University as the research university of Uganda and beyondas the research university of Uganda and beyond

2.2. To promote generation of Science, Technology and Innovation (STI) and To promote generation of Science, Technology and Innovation (STI) and their accessibility to Ugandan society with a view to improving the their accessibility to Ugandan society with a view to improving the welfare of the nation.welfare of the nation.

ObjectivesObjectives

e)e)To increase the entrepreneurship ability of staff and students by incubating To increase the entrepreneurship ability of staff and students by incubating ideas in areas such as alternative power solutions, use of bio technology and ideas in areas such as alternative power solutions, use of bio technology and software development for adoption by the private sector.software development for adoption by the private sector.

f)f)To increase funding to university research and institute competitive grants.To increase funding to university research and institute competitive grants.

g)g)To establish an Intellectual Property facility to protect the university’s To establish an Intellectual Property facility to protect the university’s intellectual assets.intellectual assets.

h)h)--

i)i)To promote the use and application of traditional, conventional and emerging To promote the use and application of traditional, conventional and emerging technologies for sustainable development.technologies for sustainable development.

OutreachOutreach

GoalGoalTo enhance the capacity of the university to link with and service To enhance the capacity of the university to link with and service community, private and public sectors and other universities.community, private and public sectors and other universities.

ObjectivesObjectivesnTo improve the visibility of Mak in Outreach & Community To improve the visibility of Mak in Outreach & Community DevelopmentDevelopmentnTo improve Government access to pro-policy services, knowledge To improve Government access to pro-policy services, knowledge & advice from Mak& advice from MaknTo improve Community access to knowledge and skills, advice, To improve Community access to knowledge and skills, advice, technology & innovations from Maktechnology & innovations from MaknTo enhance Mak’s competitive position as a technology To enhance Mak’s competitive position as a technology development & referral institution for vocational & community development & referral institution for vocational & community developmentdevelopment

Vision and Mission of the Vision and Mission of the FTBICFTBIC

VisionVision• Where world class Where world class productsproducts and and enterprisesenterprises are born. are born.

  MissionMission• To nurture and sustain new and existing food To nurture and sustain new and existing food and allied businesses by providing innovative and allied businesses by providing innovative research, practical solutions, linkages, research, practical solutions, linkages, entrepreneurship development and outreach entrepreneurship development and outreach leading to wealth creation and nutritional leading to wealth creation and nutritional enhancementenhancement..

Objectives of the FTBICObjectives of the FTBIC

To develop viable technologies and knowledge To develop viable technologies and knowledge driven food processing and nutrition enterprisesdriven food processing and nutrition enterprises

To promote entrepreneurship amongst students To promote entrepreneurship amongst students and staff of Mak and beyond. and staff of Mak and beyond.

To support commercial enterprises (SMEs) based To support commercial enterprises (SMEs) based on technologies developed at the University. on technologies developed at the University.

To build human capacity in agro-processing, To build human capacity in agro-processing, value-addition, nutrition and entrepreneurship.value-addition, nutrition and entrepreneurship.

Presidential support and its Presidential support and its achievementsachievements

Infrastructure developmentInfrastructure development Pilot plant equipmentPilot plant equipment Laboratory equipmentLaboratory equipment Incubation (in-house and virtual)Incubation (in-house and virtual) Research and developmentResearch and development Services to SMEs (Consultancy, Contract Services to SMEs (Consultancy, Contract

processing and laboratory services)processing and laboratory services) Product prospecting and services to the Product prospecting and services to the

communitycommunity Skills training and entrepreneurship.Skills training and entrepreneurship.

Infrastructure and equipmentInfrastructure and equipment

InfrastructureInfrastructure•Processing space: 1200 mProcessing space: 1200 m22 addedadded•Another structure is being Another structure is being designed to add 6,000 designed to add 6,000 mm22

Infrastructure and equipmentInfrastructure and equipmentPilot plant EquipmentPilot plant Equipment•Fruit and veg. processing lineFruit and veg. processing line•Dairy lineDairy line•Meat lineMeat line•Baking lineBaking line•Mobile fruit and vegetable processorMobile fruit and vegetable processor•Cereals processing equipment – Cereals processing equipment – procured awaiting installationprocured awaiting installation

Infrastructure and equipmentInfrastructure and equipment

Laboratory EquipmentLaboratory Equipment•Food Safety and Quality Food Safety and Quality assurance labs equippedassurance labs equipped

Benefits of the FTBICBenefits of the FTBIC

Students carry out industrial training in-Students carry out industrial training in-house house

Students from other Universities and Students from other Universities and colleges come for attachment colleges come for attachment

SME have access to some of the SME have access to some of the equipment that are only available in our equipment that are only available in our plant.plant.

Chemical and microbiological analysis of Chemical and microbiological analysis of food carried out from our labs (for internal food carried out from our labs (for internal use and SMEs)use and SMEs)

IncubationIncubation

15 companies have been registered15 companies have been registered 15 enterprises have been nurtured from 15 enterprises have been nurtured from

the FTBICthe FTBIC• 3 have graduated3 have graduated• 12 to graduate this year12 to graduate this year• 20 brands registered20 brands registered• More than 30 different products developed and More than 30 different products developed and

on the marketon the market• More than 60 jobs createdMore than 60 jobs created

5 virtual incubates being supported5 virtual incubates being supported

Choice Cuts LtdChoice Cuts LtdCompany Choice Cuts Ltd

Products Beef Sausages, Smoked Beef and meat loaf

Production Volume/Month

2000 kg

Revenue/ Month UGX 16,000,000.00

Current Direct Employment

6

Potential Direct Employment

50-70

Prospects Production 10,000 kg/monthRevenue 80 million/monthInvestment 500 million

Dawn Industries LtdDawn Industries LtdCompany Dawn Industries Ltd

Products Pineapple Nectar and Cocktails

Production Volume/Month

500 Crates

Revenue/ Month UGX 7,200,000.00

Current Direct Employment

5

Potential Direct Employment

100-150

Prospects Production 2500 Crates/monthRevenue 36 million/monthInvestment 300 million1818

Nutreal LtdNutreal LtdCompany Nutreal Ltd

Products Health Amaranth Grain/Cereal/ Legume Products

Production Volume/Month 2000 kg in assorted packages

Revenue/ Month UGX 12,000,000.00

Current Direct Employment 6

Potential Employment 50-70

Prospects Production 10000kg/monthRevenue 60 million/monthInvestment 300 million

House of Russa LtdHouse of Russa LtdCompany House Russa Ltd

Products Natural flavored liqueurs

Production Volume/Month

200 Bottles

Revenue/ Month UGX 6,000,000.00

Current Direct Employment

4

Potential Direct Employment

50-70

Prospects Production 1000 bot/monthRevenue 30 million/monthInvestment 300 million

Research and DevelopmentResearch and Development

Food product and process developmentFood product and process development16 projects supported to develop products that address 16 projects supported to develop products that address specific market needsspecific market needsAll products reached market testing stageAll products reached market testing stage2 patents obtained2 patents obtained

• improved process for banana juice extraction (factory improved process for banana juice extraction (factory being set up)being set up)

• Process for extraction of mulondo flavor and its use in Process for extraction of mulondo flavor and its use in flavouring beverages (company producing Omulondo flavouring beverages (company producing Omulondo liqueur being incubated)liqueur being incubated)

3 patent applications filed3 patent applications filed

Research and Development Research and Development

Process machine design and Process machine design and manufacturemanufactureSoya milk extraction Soya milk extraction machine designed, , manufactured and is being pilot tested by one of manufactured and is being pilot tested by one of the enterprises.the enterprises.Batch pasteurizer (multipurpose use, juice, milk, Batch pasteurizer (multipurpose use, juice, milk, etc) designed, manufactured and being pilot tested.etc) designed, manufactured and being pilot tested.Continuous pasteurizer undergoing designContinuous pasteurizer undergoing design

Services to community and prospectingServices to community and prospecting

Mobile fruit and vegetable Mobile fruit and vegetable processor acquiredprocessor acquired• Deployed in Yumbe Deployed in Yumbe

District to District to process mangoes 2013 2013 and 2014and 2014

As a result a mango As a result a mango processing plant is planned processing plant is planned for for Yumbe District

• Deployed to pilot process Deployed to pilot process tomatoes in Nakaseke tomatoes in Nakaseke District 2013District 2013

A rural industrial centre is A rural industrial centre is being established in being established in KapeekaKapeeka

Services cont.Services cont.

Pineapple pulp and Citrus juice Pineapple pulp and Citrus juice extractors hired by hired by SMEs to process their products.SMEs to process their products.

Food composition and microbiological tests carried out Food composition and microbiological tests carried out for SME on a regular basis.for SME on a regular basis.

Consultancy in product development and trouble Consultancy in product development and trouble shooting for the food industry by our staff.shooting for the food industry by our staff.

Skills Training and Skills Training and entrepreneurshipentrepreneurship

Entrepreneurship is part of the curriculum Entrepreneurship is part of the curriculum in the Schoolin the School

Short skills and entrepreneurship courses Short skills and entrepreneurship courses conducted for SMEs and those intending to conducted for SMEs and those intending to set up businessesset up businesses• Dairy products, Bakery products, Fruit juices Dairy products, Bakery products, Fruit juices

and jams, Sauces and condiments etc (demand and jams, Sauces and condiments etc (demand driven).driven).

• More than 600 people have been trained More than 600 people have been trained

ChallengesChallenges

Limited public institutional supportLimited public institutional support

Lack of an incubation policyLack of an incubation policy

Lack of a soft landing for graduate incubateesLack of a soft landing for graduate incubatees

Lack of infrastructure that meats GMP for food Lack of infrastructure that meats GMP for food based SMEsbased SMEs

Market access for products by start-upsMarket access for products by start-ups

Conclusion and RecommendationsConclusion and Recommendations One of the biggest challenges government is facing One of the biggest challenges government is facing

today is job creation for the unemployed. This can today is job creation for the unemployed. This can be achieved through growth of the private sector be achieved through growth of the private sector (increase in numbers of private enterprises and by (increase in numbers of private enterprises and by expansion of existing ones). expansion of existing ones).

Government policy is to have a private sector led Government policy is to have a private sector led economic development. This requires building a economic development. This requires building a sustainable and strong private sector for national sustainable and strong private sector for national development. Therefore, nurturing private development. Therefore, nurturing private enterprises is a critical process to deliver the enterprises is a critical process to deliver the enterprises of tomorrow. We no longer have the enterprises of tomorrow. We no longer have the luxury of a hands-off or “spanner boy” approach to luxury of a hands-off or “spanner boy” approach to business start-ups. Incubation needs to be business start-ups. Incubation needs to be mainstreamed in government policy and structures mainstreamed in government policy and structures put in place to nurture and grow the enterprises of put in place to nurture and grow the enterprises of tomorrow. tomorrow.

It has been demonstrated that Mak is a capable and willing to It has been demonstrated that Mak is a capable and willing to partner with government and the private sector to advance food partner with government and the private sector to advance food value addition technology development , its application to start value addition technology development , its application to start enterprises and to nurture the enterprises. Ultimately, it calls for enterprises and to nurture the enterprises. Ultimately, it calls for a sustainable, transparent and competitive support arrangement. a sustainable, transparent and competitive support arrangement.

The biggest driver to private sector development is a market. The biggest driver to private sector development is a market. Startups have challenges in accessing markets and therefore Startups have challenges in accessing markets and therefore government needs to preferentially purchase goods that are government needs to preferentially purchase goods that are locally produced, particularly from start-ups.locally produced, particularly from start-ups.

Uganda is capable of developing her own home grown agro-Uganda is capable of developing her own home grown agro-industry, processing local foods that can be sold local, regional industry, processing local foods that can be sold local, regional and internationally markets.and internationally markets.• If all the wild mangoes in northern Uganda were processed, they could form an If all the wild mangoes in northern Uganda were processed, they could form an

industry worth USD 100 million.industry worth USD 100 million.