Lease sugar mills to reputable investors, state urged

@alalmaurice

Sugar cane farmers from Kisumu and Nandi counties want the government to lease out state-owned sugar companies to investors with the financial capacity to revive them.

They said the investors must prepare to inject sufficient funds into the factories to run them efficiently and profitably.

The government wants to lease Muhoroni, Chemelil, Nzoia, Miwani, and Sony sugar companies for 25 years to process and develop cane on farms owned by the mills.

Farmers said the eventual winners should have the experience and financial capacity to run the companies and be able to pay their dues.

"We need investors who are able to run large sugar factories with a record of exporting sugar and ability to favourably compete globally," said Richard Langat, a grower from Nandi.

He said leasing the mills to competent investors would restore the needed confidence and trust in the sugar sector.

The farmers spoke at Chemelil in Muhoroni subcounty, during a consultative meeting organised by area MP James Koyoo and his Tinderet counterpart Julius Melly.

Chemelil Outgrowers Company chairman Samuel Bonyo said the government should ensure the right structures are in place to protect farmers from exploitation by investors.

He said they will oppose leasing the mills to one investor as it will create a monopoly in the region.

“We won’t allow a monopoly in the leasing process. We want a stiff competition for efficiency in production,” he said.

On land ownership, Bonyo said the parcels belong to the community and asked the government to come clear on the matter.

He also said potential investors must have the financial capacity and not use the land as collateral to get loans.

The farmers expressed concern that the leasing process has not gone through public participation. They demanded that their views be heard and presented a memorandum to the MPs, indicating considered views on how to promote their interests.

Koyoo and Melly urged the government to engage all sector players. They said farmers are the major stakeholders and their input is important in the leasing process. 

Koyoo said farmers have concerns that the government should consider before leasing. He said sector players support leasing but they feel sidelined.

“We support the government plan to lease the factories to investors to manage them over a period of time. But the interest of cane farmers must be well taken into consideration,” Koyoo said.

Stakeholders also want to know the value private investors will add to the economic development of the region, the legislator said.

Koyoo said the investors must tell how they will create jobs and help develop infrastructure such as roads and schools as part of their corporate social responsibility.

He also wants a proper leasing structure in place for the job security of workers. “We must avoid cases where an investor will abandon crushing sugar cane and embark on a different business.”

Koyoo said the land where the factories are built must also be well-secured as they belong to the community.

“The investors must have the capacity to develop factories and cane, but not those who will take huge loans from banks then fail to pay and leave the factories and land to be auctioned. These are issues that must be put straight into the lease process,” he said.

Melly shared similar sentiments saying the government should ensure public participation to prevent any obstacle to leasehold. He called for the inclusion of farmers in the interim team formed by Agriculture Peter Munya to oversee the process.

Melly reiterated farmers' protest against having the five mills leased to one person to avoid monopoly.

“We have resolved that farmers from Nandi and Kisumu are going to form a team that will be submitted to Munya for inclusion on the leasing process,” he said.

Former Kisumu assembly Majority leader Samuel Ong’ow said details of leasing the factories should be made public for transparency and accountability.

Munya had formed a team to guide the process as it seeks to revitalise the sugar sector which is on the brink of collapse.

Among those interested in managing the firms are two firms linked to tycoon Jaswant Rai — West Kenya Sugar Company and Sukari Industries.

Others are China CAMC Engineering Company Limited, Shenzhen Start Instruments, Mehta Group, Kibos Sugar, Butali Sugar Mills, Mini Bakeries, and Kuguru Food Complex.

Successful investors are expected to lease, redevelop, and operate the sugar complexes at sufficient processing capacities to support diversification into co-generation of export power, production of bioethanol, and allied co-products.

The efficient management of the factories is expected to play a significant role in the country’s socioeconomic development, including food security, job creation and rural development, besides being a source of livelihood for more than eight million Kenyans.