Kagera residents hail TANICA revival plan

KAGERA: RESIDENTS in Kagera Region have applauded the government for its swift intervention to rescue the Tanganyika Instant Coffee Public Limited Company (TANICA PLC) from its ongoing financial difficulties.

A resident of Nshamba Ward in Muleba District, Mr Edson Tinkaligaire (67), said the publicowned coffee processing company had become cash-strapped and was in urgent need of government support.

“We are pleased to hear that the government is taking steps to revive the company’s operations,” he noted.

Former Deputy Minister for Industry and Trade, Exaud Kigahe, recently told Parliament in Dodoma that the government was well aware of the challenges facing TANICA.

He said that through the Office of the Treasury Registrar (OTR), a feasibility study had been conducted to assess the financial requirements needed to restore the company’s performance.

“The government received TANICA’s request for 8bn/- in capital, but after analysing the company’s needs, the required amount was revised to 5bn/-,” he explained.

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Kigahe added that TANICA shareholders had been advised to seek a capital injection from the Tanzania Agricultural Development Bank (TADB) to facilitate the revival of operations. He cited key constraints facing the company, including limited capital, dilapidated machinery, outdated technology and mounting debts.

Kigahe reaffirmed the government’s commitment to ensuring that TANICA resumes full production and contributes to increasing coffee output in Kagera Region.

On January 23, 2020, former Kagera Regional Commissioner Major General Marco Gaguti dissolved the TANICA board and directed the Assistant Registrar of Cooperatives to supervise the immediate appointment of new board members.

“I have received reports indicating that TANICA was operating below required standards while incurring substantial losses. Government directives were also not properly followed,” Major Gen Gaguti said at the time.

Following these directives, the Prevention and Combating of Corruption Bureau (PCCB) on February 11, 2020, arraigned four senior TANICA officials in Economic Case No 1/2020 before the Bukoba District Magistrate’s Court.

TANICA PLC was established as Tanganyika Instant Coffee Company Limited under the Companies Ordinance (Cap 212) on September 30, 1963. The factory began producing instant coffee powder in 1967. Initially managed by Lyons until 1972 and later by Nestlé until 1982, it has since been under local management. While Nestlé made some machinery upgrades, the factory retains much of its original design.

TANICA produces pure spraydried instant coffee powder by roasting green coffee beans, grinding, extracting coffee solubles and producing hydrolysed coffee solubles. It remains the oldest instant coffee factory in East and Central Africa and one of only four in Africa.

TANICA’s shareholders hold a total of 18,094,568 paid-up shares valued at 1,447,565,440/-. Major shareholders include Kagera Cooperative Union (KCU 1990) with 9,656,391 shares worth 772.5m/- and Karagwe District Cooperative Union (KDCU) with 5,758,740 shares worth 460.7m/-.

Others include the Treasury Registrar (1,388,000 shares worth 111.0m/-), the Tanzania Federation of Cooperatives (1,125,000 shares worth 90m/-) and TANICA workers (166,437 shares worth 13.3m/-).