Paper mill recovery hinges on cheaper energy

Committing a half billion shillings to revive Pan Paper Mills may be good news for the politicians, but long term interests of the direct beneficiaries of the paper factory may still be in jeopardy because major issues touching on operational costs have not been addressed.

The previous management that abandoned the factory when creditors came knocking put its power costs at 33 per cent of the total operational costs.

This is the highest single operational cost and does not even factor in the heavy diesel the company uses to run some of its boilers.

Costs and alleged poor management resulted in the company being put under receivership last year.

Some 4,000 permanent workers and 32 casuals lost their jobs.

A primary and secondary school for the workers was closed and the Webuye Town Council almost ground to a halt for lack of business.

The closure has had extreme social and economic effects on the area.

With electricity and fuel prices not showing any signs of falling, what would assure the government that the factory’s engines would still be running in a year’s time and that creditors would not come knocking at the door, seeking to be repaid piled-up debts?

What is on record and has been ignored is the need for alternative, cheaper and sustainable raw materials that can be used to manufacture paper and also generate cheaper power for the factory.

In South Africa and Egypt, paper manufacturing factories have introduced new raw materials for sugar production, blending them with the trees.

Bargasse —a rubbery by product of sugar refining — wheat and rice straws have become important paper manufacturing raw materials in these countries.

“Sugar bargasse, for example, is one of the best raw materials for paper production. Bargasse uses less power to make paper unlike wood,” said Mr Eliud Kakai Wamocho, a paper technologist trained at the University of Manchester and Aberdeen University.

He is a lecturer at the Moi University and has worked at Pan Paper.

For a country like Kenya, where the forest cover is almost gone — at 1.7 per cent against the recommended 10 per cent — it is obvious that use of wood as a raw material for any product should be reduced until optimal forest cover is achieved.

Mumias Sugar Company uses bargasse to generate electricity and is earning carbon emission reduction money from the venture, in addition to selling electricity to the Kenya Power and Lighting Company.