Uganda will start assembling vehicles and motorcycles in January 2008 in a joint venture that will see the Chinese government and Chinese automobile manufacturer, Geely International play a crucial role according to a Nairobi newspaper report.
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The three have formed MFK Corporation to run the project, for which the government will provide the enabling environment while the Chinese will provide the technical expertise.
Uganda will be the third country in East Africa to have an automobile assembly plant after Kenya and Tanzania.
MFK Corporation manager, Juuko Lukanga told The East African that the company will kick off with the automobile assembly plant before venturing into truck assembling and, later, expanding to a fully fledged “car city” with many facilities including training institutions for engineers.
“Our production capacity for 2008 will be for 1,000 units of vehicles and 5,000 units of motorcycles,” he added.
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By GlobalDataMFK Corporation has an initial capital outlay of US$10m but will eventually raise this to US$300m to implement its programmes.
State Minister for Industry Prof Ephraim Kamuntu told The East African the development is a boost for Uganda’s long suffering automobile industry.
“We believe this is a viable project because of the demand for vehicles in Uganda. When we assemble these vehicles here, the price of first-hand vehicles will go down because many taxes will be eliminated,” he said.
Prof Kamuntu said the government provided MFK Corporation with incentives to prop up its operation, including 300 acres of land in Lukaya in Masaka district for the company’s initial start-up programme and a 10-year tax holiday.
Mr Lukanga said MFK Corporation will need up to 3,000 acres for the whole project, which will culminate in the setting up of a car city. He revealed that the government had agreed to offer all the land that they will require.
“We wanted to install the plant in Lukaya because we intend to construct a port there so that transporting our cargo from Kisumu and Mwanza is cost effective,” he said.
Mr Lukanga said MFK Corporation will be targeting the automobile market in Rwanda, Burundi, Southern Sudan and Democratic Republic of Congo, besides the Ugandan market.
Prof Kamuntu said the government has this year struck several deals with China and some private companies, including the construction of a hydroelectric dam at Isimba on the Nile, solar power generation units for rural communities, fruit processing plants and the opening of a Chinese bank in Uganda.
