East African Business Week

KAMPALA, UGANDA - Nile Breweries Limited (NBL), a subsdiary of SABMiller plc, has announced a 20% increase on its farm gate barley buying prices, a company statement said last week.
Nile Breweries will now offer Shs.650 ($0.25) and Shs.700 ($0.3) up from Shs.550 ($0.2) and Shs.630 ($0.27) per Kilogramme to small farmers and large scale farmers respectively.
Mr. George Mbogo NBL Local Sourcing Manager said, "We encourage all barley farmers in Uganda to take advantage of the current rains to prepare the gardens properly and to use the recommended inputs to get maximum yields,"
Nile Breweries has also reassured all barley farmers that all transactions shall be done in cash as had been previously.
"We guarantee that barley shall be bought in cash at all buying centres as done in the previous seasons," said Mbogo.
Nile Breweries sources its barley in the Eastern, Western, Northern and Southwestern parts of Uganda.
The use of locally sourced raw materials began in 2002 when Nile Breweries launched Eagle Lager and, subsequently, Eagle Extra both of which are brewed using sorghum grown by smallholder farmers in Uganda.
Purchases of sorghum by Nile Breweries have multiplied from 1,600 tons in 2003 to a peak of 12,000 tons in 2007 and in doing so provided income of nearly $2m to an estimated 8,000 farmers and associated beneficiaries.
This local sourcing model is now being extended to include barley for Nile Breweries' other beer brands, necessitating local malting facilities.
 NBL gets close to 6,000 tonnes per year and they expect this to more than triple in the next two years to about 20,000 tonnes to meet the requirements of the malting plant.
Nile Breweries has been importing barley as a raw material for beer production from its sister companies like Tanzania Breweries and SabMiller of South Africa. This has been expensive.
Some of the districts that grow barley in Uganda include; Kapchorwa, Bukwo, Kween, Kabale, Kanungu, Kisoro, Kabarole, Bundibugyo, Zombo, Kitgum, Nebbi and Agoro.
"I believe this is a better deal to our farmers as it increases their income, whenever they produce barley to serve our brewing needs in the brewery," said Mbogo.
Barley is used in the brewing industry mainly as malt, which is the main beer ingredient.
In its raw form, un-malted barley is used as an adjunct and in the food/ flour sector to make products like confectioneries. Barley grows in a period of three months.
At the moment, it is grown only for local consumption but in the future, if production surpasses the producers' requirements, then export to other markets will be considered.
Farmers are making a killing from selling barley to Nile Breweries. The 20,000 tonnes of barley required by NBL gives a market opportunity worth about Sh18b ($7.9m) annually to Ugandan farmers.
According to statistics, Kapchorwa District produces yields twice as those produced by Denmark.
It is projected that the country could soon join the world's chief exporters of the product - the European Union, Australia and Canada.
SABMiller has also invested $16m in a malting plant in Uganda to process locally-grown barley that is set to be commissioned soon.