Kenya has leased Mumias Sugar Company assets to Sarrai Group, a conglomerate of agro-manufacturing companies across East and Southern Africa. The 20-year lease however excludes the company’s ethanol and cogen plants.

Sarrai Group Chairman, Sarbi Singh Rai said the Group’s immediate focus is to invest in the rehabilitation of the machinery back to effective operational status. He added that they will also engage outgrowers and an experienced workforce to ensure effective collaboration to revive the factory.

“Although the lessee is not in sugar production in Kenya, he has a proven track record of running three sugar factories, a distillery and power generation in Uganda and is committed to commence rehabilitation of assets immediately to ensure revival of operations within the shortest period,” said Ponangipalli Venkata Ramana Rao, the company’s receiver manager.

Sarrai Group has a strong presence in the sugar industry in Uganda. Its sugar production affiliates include Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar, all based in Uganda.

“With over 20,000 hectares of its own nucleus estates in Uganda, the Group’s sugar production includes Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar with a total installed capacity of 19,000 TCD (tonnes crushed per day) producing over 170,000 tonnes of sugar per annum and over 12,000 registered and supported outgrower farmers being supported by various activities,” PVR Rao added.

Mumias Sugar Company trading of its shares on the Nairobi Securities Exchange (NSE) remain suspended, with the miller posting a net loss of Ksh. 15.1 billion in the financial year 2018/2019. This is against the previous year’s loss of Ksh. 6.8 billion. The company owes the Kenya Revenue Authority Ksh. 10 million in taxes, while the Kenya Commercial Bank (KCB Group) which appointed a receiver-manager is owed Ksh. 20 billion.

Other firms that had placed bids for Mumias include Pandal Industries, US based KE International, West Kenya Sugar, Krumen Finances, New Mumias Sugar/Devki Group, Kibos Sugar and Fredrick Coombes/ Sucriere Des Mascareigmes.

The Kenyan government has resolved to privatise 5 under performing state-owned sugar mills through a long-term lease model. These are Chemelil, Muhoroni, Nzoia, Sony, and Miwani. Both Muhoroni and Miwani with a combined share of 30% of the sugar industry market.