PRIVATISATION

Kepsa supports government’s plans to lease five sugar mills

Said the move will enhance the competitiveness of Kenyan sugar in global markets.

In Summary

• Kepsa CEO said that leasing out the mills will enable the private sector to mobilise resources to rehabilitate and modernise existing facilities

• Eight out of 16 sugar companies in Kenya are privately owned and Mumias is under receivership with KCB.

Chemelil Sugar Company requires Sh 258.7 million to resume milling operations
Chemelil Sugar Company Chemelil Sugar Company requires Sh 258.7 million to resume milling operations
Image: MAURICE ALAL

The Kenya Private Sector Alliance (Kepsa) has welcomed the move taken by the government to lease five state-owned sugar mills.

Kepsa CEO Carole Karuga said on Thursday through a statement that leasing the sugar mills will benefit all stakeholders, including suppliers, transporters and support farmers in the respective regions.

“We, therefore, welcome the government's move to restructure and lease these firms. We are confident that with the right strategic investors on board, the sector will return to profitability as demonstrated by private sugar mills," Karuga said.

In July, the government asked for bids to lease Chemelil, Miwani, Muhoroni, Nzoia and South Nyanza sugar companies.

Eight out of 16 sugar companies in Kenya are privately owned and Mumias is under receivership with KCB.

Karuga added that leasing out the mills will enable the private sector to mobilise resources to rehabilitate and modernise existing facilities, improve financial, technical and operational expertise.

She further said that the same action will bring in efficiency and return the mills to profitability as well as enhancing the competitiveness of Kenyan sugar in both local and global markets.

Business umbrella’s boss in the country said that Kenya’s millers are not well-positioned to compete with their rivals, especially with the impending end to sugar import quotas from COMESA.

“Kenya cannot continue asking for extensions of the COMESA deadline like it has done in the past. Leasing is the way to sustainably put our house in order,” she said.

However, the Labour Relations Court in Kisumu suspended the privatisation of state-owned sugar factories until workers’ issues, including Sh4 billion salary arrears, are addressed.

 
 

The injunction was issued on August 13 by judge Mathews Nderi Nduma, pending hearing and determination of the application.

It was filed under a certificate of urgency on August 12 by Francis Wangara, secretary general of the Kenya Union of Sugar Plantation and Allied Workers.