- Nzoia sugar MD Makokha Wanjala welcomes plans by the government to inject a new lease of life in state owned sugar factories.
- The objective of leasing the factories is to facilitate turnaround of the five millers to profitability through modernisation and efficient management
The government has called for the Expression of Interest for the leasing of five state-owned sugar factories in Western Kenya in its latest attempt to revive the sector.
This comes a week after Agriculture Cabinet Secretary Peter Munya announced a waiver of Sh62 billion owed by sugar companies to state agencies, including accrued interest on taxes.
The factories to be leased on a 25-year lease period are Chemelil, Miwani, Muhoroni, Nzoia and South Nyanza Sugar Companies.
Miwani and Muhoroni are currently under receivership.
In a paid-up advert in local families on Friday, Agriculture and Food Authority said the government is seeking investors to lease, redevelop and operate the five millers at sufficient processing capacities to support diversification into cogeneration, production of bio-ethanol and allied products.
The objective of the lease is to facilitate a turnaround of the five millers to profitability through "modernisation and efficient management that will enhance competitiveness in Kenya, East African Community, COMESA, and the global sugar market".
"GOK through AFA wishes to engage investors with world-class experience to redevelop the factories into large sugar complexes and manage them over a leasehold period of 25 years,"the advert read in part.
Interested investors — individual or consortium — , whether local or international, must demonstrate familiarity with the industry.
Those interested have until August 3 to deliver their bids.
The five factories have a 30 per cent combined market share of the sugar industry market, with a potential for increase. The county's consumption is estimated to be one million tonnes per year.
Nzoia sugar managing director Makokha Wanjala welcomed plans by the government to inject a new lease of life in the state-owned sugar factories.
"What we want is for the sugar industry to become vibrant again because it supports livelihoods of millions of our Kenyans," Wanjala said on the phone.
The sugar industry is a source of livelihood to over eight million Kenyans, largely in Western region, and a source of income to over 400,000 smallholder farmers who supply over 90 percent of cane for milling.
“What is important is to have farmers paid their dues to motivate them into cane farming and I welcome any idea that will ensure smooth and profitable operations by millers," he said.
Troubled Mumias Sugar Company, though not among the millers listed for leasing, is under receivership by the Kenya Commercial Bank Group.
Receiver manager PVR Rao on Sunday said he had not received any official communication on the waiver of the debts owed by the company.
"We have not received anything on paper about the waiver as of now. We'll talk once we receive communication," he said.
Edited by EKibii