The Ministry of Agriculture and
Livestock Development has secured a Sh12.29 billion investment from private
firms to revive four state-owned sugar mills.
Agriculture CS Mutahi Kagwe said the
investment will go to Nzoia, Chemilil, Sony and Muhoroni Sugar companies,
following a 30-year lease.
He said the move aims to restore operations,
secure farmer incomes, and preserve thousands of jobs in the sector.
“The funds will be invested directly
into the four mills to ensure that they are operational and can meet their
inbuilt threshing and sugar production capacity,” he said.
“The rehabilitation of the four
sugar companies will enable the lessees to operate at optimal capacity, thereby
safeguarding employment opportunities and enabling farmers to deliver more cane
and increase their earnings.”
West Kenya Sugar Company, which
clinched the lease for Nzoia Sugar, will pump in the largest amount of Sh5.76
billion.
Kibos Sugar & Allied Industries
Ltd. will invest Sh4.5 billion in Chemilil Sugar.
West Valley Sugar Company Ltd., now
in charge of Muhoroni, is set to invest Sh1.02 billion, while Busia Sugar
Industry Ltd. will put Sh1 billion into Sony Sugar.
Kagwe said the four firms will also
pay a combined goodwill fee of Sh521,971,400 for leasing the land owned by the
factories.
On top of this, the CS said there
will be annual lease fees which will go towards cane development and community
welfare programs.
He stated that the investment will
allow the mills to operate at full capacity, creating more demand for cane and
boosting farmer incomes.
“The
funds will be invested in cane development and cater for the welfare of
communities living around the factories,” he said.
“The
government will also use the funds to offset unpaid dues owed to farmers and
Sugar factory workers”.
Kagwe
said the Kenya Sugar Board (KSB) will also collect Sh1.5 billion concession fees
at a rate of Sh4,000 per ton (Sh4 per kg) of sugar produced and Sh240 million
concession fees at the rate of Sh3000 per Ton (Sh3 per Kg) of molasses
produced.
The
funds will be paid back to farmers in the form of annual bonuses based on the
amount of sugar supplied by each farmer to the factories.
To address existing debts, the CS
said the government has already disbursed over Sh1.7 billion to clear farmers’
arrears. An additional Sh500 million will be paid out in July.
Further, in collaboration with the
Kenya Union of Sugar Plantation and Allied Workers (KUSPAW), the government has
committed Sh1 billion to settle worker salaries and arrears.
“Under the agreement, the government
will pay workers Sh600 million to settle part of the staff arrears and Sh400
million to pay salaries for six months starting from May 2025,” Kagwe
explained.
A further Sh1.5 billion will be paid
out in July, followed by quarterly payments of Sh1.17 billion to clear all
outstanding worker arrears.
The CS reassured the public that no factories have been sold.
“The leasing process was
transparent, guided by parliamentary approval, and involved thorough
consultation with farmers, unions, MPs, and county leaders,” he said.
Kagwe pledged full transparency and
readiness to share documentation with Parliament and the public, promising that
all concerns will be addressed.
