Business

State extends deadline for investors to bid for lease of five sugar firms

Thursday, February 8th, 2024 03:12 | By
Sugar Directorate director Jude Chesire. PHOTO/Print
Sugar Directorate director Jude Chesire. PHOTO/Print

The government has agreed to extend the deadline for investors to show interest in the planned leasing of the five struggling state-owned sugar mills.

Sugar Directorate director Jude Chesire said they will extend the timelines following concerns raised over the limited duration to invite strategic investors.

“We have received the concerns and there is consensus that we extend the timelines beyond the lapse of February 15,” he told the Business Hub yesterday.

Representatives of cane farmers had protested at the limited duration with Kenya National Sugarcane growers’ Association (Kesga) officials led by Secretary General Richard Ogendo terming the proposed timelines as too short.

Expression of interests

“The Government has given the new investors up to February,15 to submit expression of Interests (EOI), to run the firms. We feel this time is short,’’ he said. Ogendo claimed that the expression of interest period should have been at least three months to allow international bidders to come in and show interest.

By yesterday only private sugar millers such as West Valley, Butali, Transmara sugar factories and sugar barons had expressed interests to lease the firms, a move that could lock out international bidders from Brazil, Thailand, South Africa and India where sugar is grown on a large scale and technologically advanced.

The Sugar Directorate had placed an advert calling on the strategic investors to tour the firms and window shop in readiness for the bids and/or expression of interests.

Last week, a number of investors toured the sugar factories to acquaint themselves with the state of the firms, before they place their strategic bids. Ministry of Agriculture and Crops Development has put up Nzoia, South Nyanza (Sony), Chemelil, Muhoroni and Miwani sugar companies for the lease.

The government owns a 98.8 per cent stake in Sony, 97.93 per cent in Nzoia, 96.22 per cent in Chemelil through the Agricultural Development Corporation (ADC) and 1.42 per cent through the Development Bank of Kenya (DBK). It also owns 82.8 per cent stake in Muhoroni and 49 per cent in Miwani.

Speaking to the Business Hub, Ogendo claimed they want the new investors to be given only 51 per cent stake in the firms.

“The rest of shareholding should be given to the farmers, workers and rest warehoused in the government as the custodian of the firms,’’ he said

He proposed the investors get 51 per cent, farmers 30 per cent, counties 10 per cent because agriculture is devolved with the government and workers having 5 per cent each.

“Farmers also want to own the factories same way as Kenya Tea Development Authority (KTDA). This is what will also empower the growers,’’ he claimed.

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