This archive report was first published on 22 December 2021.
Wednesday, December 22, 2021, marked a significant milestone for Mumias Sugar Company as Uganda-based conglomerate Sarrai Group secured a 20-year lease for its assets.
The lease, however, excludes the company's ethanol and cogen plants, which were recently seized by Pan-African lender Ecobank and French development financier Proparco from KCB Group.
According to Pongangipalli Venkata Ramana Rao, the miller's receiver-manager, the lessee, Sarrai Group, has a proven track record of running three sugar factories, a distillery, and power generation in Uganda.
Mr. Rao stated, '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.'
The lease agreement is in line with the recent court ruling dated November 19, 2021, and is in the interest of all stakeholders, according to Mr. Rao.
The Sarrai Group is owned by the billionaire Rai family, which operates various businesses in Uganda and Malawi, including sugar and plywood industries.
The group also operates Rai Cement in Kenya and runs Kinyara, Hoima, and Kiryandongo sugar factories in Uganda.
The Rai Group in Kenya owns three millers - West Kenya, Sukari Industries, and Olepito Sugar.
Mumias Sugar Company, which used to be Kenya's leading producer at over 250,000 tonnes a year, was beset by poor management, heavy debts, and years of mounting losses, prompting its closure.
The miller was placed under receivership by KCB in September 2019 to protect its assets and maintain its operations.
Chairman of Sarrai Group, Sarbi Singh Rai, expressed his commitment to reviving the company, stating, 'Mumias Sugar was the most respected sugar company not only in Kenya but the entire region, and it is our firm commitment to all the stakeholders that we shall use all our experience and resources to make sure that we revive the company and take it back to the heights it once enjoyed.'
