Sugar, Cement and Steel; the tycoons’ race to capture Kenyan industry
When someone makes enough money it is no longer the reason they wake up in the morning; their everyday grind is a push for more than just profits.
Billionaire wars are fought on egotistic challenges for supremacy, rivalry, turf wars and on rare occasions, a shared historical encounter.
For Kenya’s kings of carcasses, billionaires Narendra Raval and rival Jaswant Rai are expanding through buying dying companies and in the process, stepping on each other’s toes.
The fight over Mumias Sugar Company is just a new face of a struggle between billionaire magnates Narendra Raval and competitor Jaswant Rai.
Rai known for his sugar milling to cooking oil and soap manufacturing businesses through Menengai oil, Western Kenya Sugar, Sukari Industries and Olepito Sugar Company has been making inroads into cement manufacturing after he established a smaller cement plant in Awasi, Kisumu County. He also bought Pan-Paper and renamed it Rai paper.
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Rai is the sugar magnate controlling 44 per cent market share through his three millers – West Kenya, Sukari Industries, and Olepito Sugar.
He has been planning an expansion in controlling the sweetener, having bid for Chemelil, Sony, Nzoia, Miwani and Muhoroni targeted for privatization under reforms aimed at reviving the ailing sector.
It has now been revealed that Rai had also put a bid for erstwhile giant miller, Mumias sugar through Ugandan subsidiary, Sarrai Group.
On the other hand, Raval, popularly known as Guru is the king of steel through his company Devki Group has been expanding his empire into cement business.
In 2015, a Nigerian magnate approached Guru, with a proposal to acquire part of the Devki empire as a means of accessing the East African market. Mr Raval turned down Mr Dangote’s offer.
He has since been expanding rapidly and he beat Rai to the court battle to take over Athi River Mining (ARM) where Guru emerged the winner and gave him teeth into cement and fertilizer business.
ARM deal made Guru’s National Cement Company (NCC) which manufactures the Simba Cement brand, the second biggest cement maker in the country.
National Cement expansion saw it merge with Cemtech in West Pokot with significant limestone and clay deposits that are key components in its production.
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Raval is also erecting a second 1.8 million metric tonnes per annum clinker line in Kajiado where construction started this year.
He is also setting up another 0.75 million metric tonnes cement plant to be built in Kilifi County while the 0.88 million metric tonnes is still underway and was to be commissioned in mid-2020.
But it was Mumias sugar that again brought the two billionaires face to face as they jostled with each other for more industrial space.
Guru reportedly sweetened his way with a bid promising to inject Sh5 billion to modernise the miller but has since beaten a hasty retreat from the deal claiming he wanted to protect his business name and reputation from being muddied in politics.
The ascent of the two magnates is, however, mired with political tenterhooks and a tendency to vulture for collapsing companies especially those belonging to the state to buy them at a bargain.
From ARM, Mumias Sugar, Pan Paper, Chemelil, Sony, Nzoia, Miwani and Muhoroni their strategy seems to rely on state capture and behind the scenes lobbying.
