Nairobi: The government has completed the leasing process of four public sugar factories to revive the once-thriving sugar sector in the country. The Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe announced that four private millers have been awarded a 30-year lease for the operation of Nzoia, Chemilil, Sony, and Muhoroni Sugar Companies.
According to Kenya News Agency, the procurement of the four firms followed broad-based engagement with stakeholders across the sugar sector dating back to 2015, when Parliament approved the process. In a press statement, the CS revealed that West Kenya Sugar Company has been awarded the lease for Nzoia Sugar Company, while Kibos Sugar and Allied Industries Limited has secured Chemilil Sugar Company. Busia Sugar Industry Ltd will operate Sony Sugar Company, and West Valley Sugar Company will manage Muhoroni Sugar Company.
The four firms were competitively procured by the government through the Ministry of Agriculture and Livestock Development, the Kenya Sugar Board, and other key governmental players. Kagwe noted that the decision to lease out the four factories was reached after extensive consultations with key stakeholders, including farmers, sugar factory workers, unions, Members of Parliament, Governors, and Cabinet approvals.
The choice to lease was driven by the need to ensure a return on investment for taxpayers who have historically bailed out the struggling sugar sector. Last year, the government wrote off over Sh117 billion to support the local sugar industry and injected an additional Sh2.5 billion to clear arrears owed to farmers and workers.
Kagwe emphasized that due process was followed in selecting leasing as a viable model for the transformation and rehabilitation of the four sugar factories, as guided by Parliament and the Cabinet. In November 2018, the government established a task force on the sugar industry to examine challenges facing public sugar companies and provide recommendations.
The Ministry reassures all stakeholders that no public land will be sold or acquired under the leasing agreements. All assets belonging to the four sugar companies, including land, will remain the property of the national government. These assets will be leased annually based on the prevailing market rate, with proceeds collected by the Kenya Sugar Board for reinvestment into communities around the factories and for use in cane development.
Kagwe stated that public participation has been considered and ruled on, affirming that public engagement led to the recommendation to lease the sugar companies. He called for continued support in realizing this vision and assured that the government is committed to addressing any concerns that may arise, emphasizing that the negotiated terms represent the best possible outcome to revive the sugar sector.