For generations of tea farmers in Bushenyi and the wider Ankole sub-region, Igara Growers Tea Factory has been more than a processing plant.
It has been an economic lifeline, connecting rural households to international markets, creating employment and supporting businesses dependent on tea production.
Established in 1969, the farmer-owned enterprise grew into one of southwestern Uganda’s most important agricultural investments, bringing together more than 7,000 growers.
But the company that helped transform smallholder farming into commercial agriculture now faces one of its gravest crises.
Its factories, plantations and other properties have been advertised for sale as dfcu Bank moves to recover outstanding loans.
Behind the threatened auction lies a deeper crisis involving financial losses, unpaid farmers, salary arrears, disputed leadership and prolonged disagreements over the management of company resources.
Court rulings, regulatory proceedings and bank correspondence show that the threatened sale is the peak of problems that have become increasingly visible since 2023.
Factories face auction
On Wednesday, S and L Advocates, acting on the instructions of dfcu Bank, advertised several Igara properties for sale by public auction.
The properties include a tea factory at Butare-Kabingo, factory facilities at Burere, tea estates, eucalyptus plantations, a guesthouse and workers’ facilities.
The Burere property covers approximately 11.91 hectares, while the tea factory at Kabingo measures approximately 4.55 hectares.
Other advertised assets include properties at Kakombe, Rwantaramabi, Omukirembe and Nyarugote.
These are not merely investment properties. They form part of the infrastructure through which Igara processes farmers’ green leaf, maintains production and supports its operations.
Their disposal, which could happen within 30 days of the October 7 advertising, could, therefore, undermine the company’s ability to continue operating.
Earlier, a May 8 default notice identified dfcu as the lender and demanded payment of $1.04m (Shs4.17b) and Shs23.84m, which totals Shs4.2b, excluding recovery costs.
The facilities had been obtained and utilised in 2024.
In its notice, S and L Advocates noted that Igara had requested a three-week moratorium on April 2, 2026, to clear outstanding arrears, which dfcu accepted on April 9, but the company failed to honour the revised arrangements.
S and L Advocates subsequently threatened enforcement, setting the stage for the Wednesday notice.
An economic symbol
Igara emerged from efforts to give smallholder farmers greater participation in commercial tea production, including ownership of processing facilities and access to export markets.
Research by Economic Policy Research Centre identifies Igara alongside Kayonza, Mabale and Mpanga among Uganda’s early smallholder-owned tea factories.
A business model presented by Igara in 2014 reported annual green-leaf production of about 34 million kilogrammes, valued at $7.2m in the local economy.
Igara also reported receiving a $2.4m government grant in 2008 to finance buildings for its Buhweju factory.
These investments helped establish Igara as an economic anchor extending beyond Bushenyi into neighbouring tea-growing districts.
Its difficulties, however, have emerged amid broader problems in Uganda’s tea industry.
The Uganda Development Corporation 2023/24 annual report reported that Mabale Tea Factory’s workforce had declined from 447 employees in 2023 to 306 in 2024, while Kigezi Highland’s fell from 247 to 75.
Mpanga suspended operations in early 2024, affecting 346 workers.
However, Igara’s crisis extends beyond depressed tea prices into questions of financial management and corporate governance.
Financial troubles deepen
On June 7, 2024, High Court Judge Emmanuel Baguma considered an application by Igara’s then board chairman, Samuel Muheereza Karumira, seeking permission to postpone the company’s annual general meeting.
The company argued that its deteriorating finances made the meeting unaffordable.
In an affidavit, Muheereza disclosed losses of Shs4.44b in 2023 and another Shs1.15b between January and March 2024.
Together, Igara had lost approximately Shs5.59b within 15 months. Muheereza estimated that convening shareholders would cost Shs250m, which the company could not readily raise.
Justice Baguma allowed and considered the delayed meeting to be held by December 31, 2024. The ruling established that Igara’s financial difficulties had become serious enough to interfere with its obligations to shareholders.
By 2026, the problems had spread beyond accounting losses.
In proceedings before Uganda Registration Services Bureau (URSB), shareholders alleged that Igara had accumulated approximately Shs21.1b in liabilities.
These reportedly included Shs6b owed to tea growers, Shs1.4b in salary arrears and Shs1.7b in unremitted NSSF contributions.
The figures were presented as allegations requiring investigation and have not been subjected to an audit or judicial process.
But in URBS proceedings, shareholder Willis Bashaasha testified that Igara owed him approximately Shs29m for tea supplied since 2023.
Factory workers Winnie Natukunda and John Mbendiho also described unpaid wages and concerns about deductions allegedly not remitted to their intended recipients.
Boardroom battles
As the financial crisis deepened, Igara became embroiled in a leadership dispute rooted partly in amendments to its Articles of Association in 2017.
At an extraordinary general meeting on January 31, 2025, shareholders extended the existing board’s mandate until August 2025.
Subsequent elections became contentious, with disagreements over candidate qualifications, vetting procedures, and the legitimacy of directors.
In May 2026, High Court Judge Amos Kwizera dismissed proceedings brought by shareholder Richard Nshumbusha on procedural grounds, without determining the substantive allegations.
The dispute subsequently reached URSB.
Shareholders argued that the board’s mandate had expired, while Igara maintained that incumbent directors could remain until lawfully replaced.
In a July 10 ruling, Assistant Registrar of Companies Daniel Nasasira referred the question of the board’s legitimacy to the High Court and restricted further filings by persons claiming disputed directorial authority.
He also found sufficient grounds for an investigation into the company’s affairs but deferred appointing inspectors until the leadership dispute was resolved.
Shareholders had questioned how Igara continued receiving proceeds from tea sales through the Mombasa auction while failing to meet financial obligations.
The company disputed allegations of mismanagement, citing depressed tea prices and wider industry difficulties.
The Registrar’s ruling did not establish fraud or criminal wrongdoing.
An uncertain future
Igara now faces two connected challenges: settling its debts and restoring confidence in its leadership.
Government assistance, reportedly discussed with struggling tea factories, could ease financial pressure.
However, funding alone cannot resolve disputed authority, unpaid obligations, or questions about financial accountability.
The threatened disposal marks a critical moment for an enterprise built to give farmers greater control over their economic future.
For Bushenyi and the wider Ankole sub-region, the concern extends beyond recovering bank loans.
It is whether a company that has supported thousands of farming households for 57 years can preserve the productive assets on which its survival depends.