This archive report was first published on 21 August 2020.
The Kenya Private Sector Alliance has welcomed the government's plan to lease five state-owned sugar mills, citing it as a move to improve the country's sugar sector competitiveness.
The proposed leasing of Chemelil, Miwani, Muhoroni, Nzoia, and South Nyanza sugar companies has been supported by the business umbrella CEO Caroline Karuga, who believes it will benefit all stakeholders across the value chain.
According to Ms. Karuga, leasing the sugar mills will enable the private sector to mobilize resources to rehabilitate and modernize existing facilities, improve financial, technical and operational expertise, and bring in efficiency.
“KEPSA was one of the stakeholders who recommended leasing of the debt-ridden sugar mills to private investors two years ago, to give them a new lease of life. We, therefore, welcome the government’s move to restructure and lease these firms,” Ms. Karuga said.
The five mills have had loss-making streaks for more than a decade, negatively affecting economies in the regions they operate in, and the country as a whole.
Ms. Karuga added that leasing out of the mills will enhance competitiveness of Kenyan Sugar in both local and global markets, and enable the sector to be as competitive as other agricultural sectors, such as tea and coffee.
Under the proposed privatization move, the winning bidders will lease the factories for at least 25 years, operate them and produce sugar as private entities while the government will continue owning the assets.
