Tanzania has inaugurated a US$39.6 million rice milling facility in the Kahama district, marking a major step in the East African country’s drive to strengthen agricultural value chains and expand agro-processing, authorities said.
The plant, developed by local company KOM Food Products Ltd, is located on a 54-hectare site in the Shinyanga region and is expected to source most of its paddy rice from nearby smallholder farmers. While processing capacity was not disclosed, the Tanzania Investment and Export Zones Authority (TISEZA) described the facility as one of the country’s most significant agro-industrial projects.
“Beyond industrial output, the project is expected to strengthen agricultural value chains in Shinyanga Region by providing a stable market for paddy rice produced by smallholder farmers,” TISEZA said in a statement. “The investment supports Tanzania’s broader strategy to expand domestic agro-processing, enhance food security, and retain more value within the country by shifting more of the rice value chain from farming to milling and packaging into local production.”
The facility is part of a broader national push to boost domestic processing of staple crops, retain higher value locally, and increase export potential. Tanzania has been self-sufficient in rice for several years, producing an average of 2.43 million tonnes per year between 2019/2020 and 2023/2024, compared with domestic consumption of around 1.2 million tonnes annually, according to the Ministry of Agriculture.
By processing locally, the Kahama mill is expected to raise milling capacity and increase volumes available for export, particularly to neighboring East African countries. KOM Food Products plans to scale up production in phases to meet rising domestic demand while exploring regional market opportunities in East and Southern Africa.
More Read
Tanzanian rice exports have fluctuated in recent years, averaging nearly 387,066 tonnes of milled rice per year from 2020 to 2024, with a peak of 622,422 tonnes in 2022. Export revenues during the period averaged approximately $191 million annually. Key export destinations include Uganda, Kenya, Rwanda, and the Democratic Republic of Congo.
Industry analysts say the new mill could help Tanzania capture a larger share of the East African rice market. According to Trade Map data, East African Community (EAC) countries imported nearly 2.6 million tonnes of cereals in 2024, valued at $1.14 billion. Expanding local processing and exports could position Tanzania as a regional hub for rice production and distribution.
The Kahama facility is also expected to create employment opportunities in agro-processing and logistics, while supporting the government’s rural development initiatives. Local farmers supplying paddy rice are likely to benefit from a more predictable and stable income, while consumers could see improved availability of milled rice in domestic markets.
Tanzania’s government has increasingly encouraged private sector investment in agro-processing as part of its economic diversification strategy. By fostering partnerships between local businesses and smallholder farmers, authorities aim to increase food security, promote industrialization, and enhance regional trade competitiveness.
TISEZA noted that KOM Food Products’ phased expansion strategy aligns with broader government objectives of developing industrial clusters that can process key agricultural commodities. Over time, the facility is expected to incorporate modern technologies for milling, packaging, and storage, raising standards across Tanzania’s rice sector.
With the launch of the Kahama mill, Tanzania joins other East African nations in strengthening local agro-processing capacities to support farmers, improve value retention, and increase export potential. The government anticipates that facilities like this will play a pivotal role in regional integration, trade expansion, and the creation of sustainable employment in the agricultural sector.
