Uganda miller to the rescue of crisis-saddled Mumias Sugar
Ugandan agri-manufacturing conglomerate Sarrai Group has won the bid to lease the assets of ailing Mumias Sugar Company.
The deal offers the company the mandate to revive the collapsed sugar miller after emerging the winner of bidding that lasted over four months.
Mumias Sugar receiver-manager and court-appointed administrator, Mr P V Rao noted that the lease is in the interest of all stakeholders and in conformity with recent court ruling dated 19 November, this year.
“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 the revival of operations within the shortest time,” noted Mr Rao.
Mr Rao, however, noted that the leasing agreement does not include Mumias Sugar’s Ethanol and Cogen plants.
Sarrai Group chairman Sarbi Singh Rai has set out the firm’s immediate focus as to investing in the rehabilitation of the machinery back to effective operational status.
The Uganda-based sugar miller also plans to immediately engage outgrowers as well as hire an experienced workforce to ensure that there is effective collaboration to revive the factory that left millions of farmers in poverty since its collapse.
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“Mumias sugar was the most respected sugar company not only in Kenya but the entire region and it is our firm commitment to all stakeholders that we shall use all our experience and resources to make sure that we revive the company and take it to the heights it once enjoyed,” said Sarbi Rai.
Sarrai Group is Uganda-based conglomerate of diverse but inter-related agro-manufacturing investments across East and Southern Africa with a presence in Uganda, Kenya, and Malawi.
The company runs 20,000 hectares of a nucleus sugar estate in Uganda, with production in Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar.
At the moment, the firm has a total installed capacity of 19,000 tonnes crushed per day and makes over 170,000 tonnes of sugar per year.
Sarrai Group currently has over 12,000 registered and supported out-grower farmers.
In Kenya, three millers – West Kenya, Sukari Industries, and Olepito Sugar that are owned by billionaire Jaswant Rai – jointly control roughly 44 percent of the sugar market.
In May, Steel tycoon Narendra Raval sought to revive Mumias Sugar through a leasing deal but dropped his Kes5 billion offer citing rising political interests.
“I was told that I am the winner, but it is unfortunate that I will not continue with the plans to invest at Mumias because of the new political twist that has questioned the process of selection,” he told Business Daily.
Mumias Sugar was placed under receivership by KCB Group in September 2019 to protect its assets and maintain its operations.
