In the late 1980s, most manufacturing industries relied on agricultural products for raw materials and machinery, and as a result, the problems plaguing the agriculture sector hampered both production and marketing in manufacturing. Processing cotton, coffee, sugar, and food crops were major industries, but Uganda also produced textiles, tobacco, beverages, wood and paper products, construction materials, and chemicals.
In the late 1980s, the government began to return some nationalized manufacturing firms to the private sector in order to encourage private investment. The primary aim was to promote self-sufficiency in consumer goods and strengthen linkages between agriculture and industry. By 1989 the government estimated manufacturing output to be only about one-third of postindependence peak levels achieved in 1970 and 1971. Only eleven out of eighty-two manufacturing establishments surveyed by the Ministry of Planning and Economic Development were operating at more than 35 percent capacity. Overall industrial output increased between January 1986 and June 1989, and the contribution from manufacturing increased from only 5 percent to more than 11 percent during the same period.
In the late 1980s, eight companies produced steel products in Uganda, but they were operating at only about 20 percent of capacity, despite increased output after 1986. Their most widely used products were gardening hoes and galvanized corrugated sheets of steel. The production of steel sheets declined dramatically in 1987, leaving some factories operating at only 5 percent of capacity. At the same time, hoe production increased 30 percent over 1986 levels. The government attempted to rejuvenate the industry in 1987 by assessing the availability of scrap iron and the demand for steel products and by providing US$2.7 million in machinery and equipment for use by the government-operated East African Steel Corporation.
The nation's two cement-producing plants at Hoima and Tororo, both operated by the Uganda Cement Industry, also reduced production sharply, from more than 76,000 tons of cement in 1986 to less than 16,000 tons in 1988. Neither plant operated at more than 5 percent of capacity during this time. The government again provided funds, roughly US$3.2 million, for rehabilitating the industry and initiated a study of ways to improve this potentially vital sector of the economy.
In 1989 the government estimated that the nation's four textile mills manufactured about 8 million meters of cotton cloth per year, but Uganda's growing population required at least ten times this amount to attain self-sufficiency. The government began rehabilitating three other mills for weaving and spinning operations, and the United Garment Industries commissioned a plant to manufacture knitted apparel, some of it for export, under a US$3 million rehabilitation loan.
The production of beverages, including alcoholic beverages and soft drinks, increased in the late 1980s, and officials believed Uganda could achieve self-sufficiency in this area in the 1990s. In 1987 three breweries increased their production by an average of 100 percent, to more than 16 million liters. In the same year, five soft drink producers increased output by 15 percent to nearly 6 million liters. In addition, Lake Victoria Bottling Company, producers of Pepsi Cola, completed construction of a new plant at Nakawa.
Sugar production was vital to the soft drink industry, so rehabilitating the sugar industry promised to assist in attaining self-sufficiency in beverage production. The government hoped to reduce sugar imports from Cuba as the Lugazi and Kakira estates resumed production in 1989 and 1990. In 1988 and 1989, Uganda's dairy industry relied on imports of dried milk powder and butter to produce milk for sale to the general public. Processed milk, produced under monopoly by the government-owned Uganda Dairy Corporation, registered an increase of 29.5 percent, from 13 million liters in 1986 to 16.9 million liters in 1987. To improve the local dairy industry, the government rehabilitated milk cooling and collection centers, milk processing plants, and the industry's vehicles. And in the late 1980s, the Ministry of Agriculture, Animal Husbandry, and Fisheries imported 1,500 in-calf freisian heifers to form the nucleus of a restocking effort on private and government farms.
Production of wheat and corn flour increased in 1987, 1988, and 1989, despite continuing low-capacity utilization in the industry. Only one establishment, the Uganda Millers, which worked at just over 20 percent of capacity, produced wheat flour. The company nonetheless increased production to 9.5 thousand tons in 1987, 32 percent more than the previous year. At the same time, corn production increased 87.3 percent in 1987, to 4.6 thousand tons.
In 1988 only one cigarette-manufacturing plant, the British American Tobacco Company, operated in Uganda. Its production increased slightly between 1986 and 1987 to 1,434.8 million cigarettes. In 1988 the government provided a loan of US$1.43 million to rehabilitate the company's tobacco redrying plant in Kampala.
In November 1988, President Museveni opened an edible oil mill at Tororo to process cotton, sunflowers, peanuts, and sesame seeds. The plant had the capacity to process fifteen tons of raw oil daily into 4.3 tons of refined cooking oil and to produce an estimated 300 tons of soap annually as a by-product. The mill was built under a barter deal with Schwermaschinen Kombinat Ernst Thaelmann of the German Democratic Republic (East Germany), which received coffee and cotton in exchange. In its first year of production, the plant encountered operating difficulties, but its officers still expected Uganda to achieve self-sufficiency in edible oil manufacturing during the 1990s. Mukwano Industries, Uganda's largest soap-manufacturing company, doubled production in 1988 and 1989.
The Uganda Leather and Tanning Industry was the nation's only leather producer, operating at less than 5 percent of capacity in 1987, when output dropped by nearly 40 percent from the previous year. Although three footwear producers were in operation, the Uganda Bata Shoe Company produced 98 percent of the nation's shoes, and it increased production in 1988 and 1989.
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