The billionaire Rai family plans to spend Sh165 million to increase the production capacity of its Homa Bay-based sugar factory.
The family, which last year bought the collapsed PanPaper Mills for Sh900 million, said it plans to expand the capacity of Sukari Industries from 1,500 tonnes to 5,000 tonnes, a more than threefold increase.
The expansion will see the firm install equipment which will enable the business “reduce waste generation, reduce energy consumption and produce better quality product,” the firm says in regulatory filings.
“In today’s competitive market, efficiency in every front is crucial for survival. The economic scale of operation — sizing of the factory and implementation of advance and modern technology — is a must.”
The management, the firm adds, is focusing on implementation of standby equipment with up graded technology.
“This will help the factory to run with reduced stoppage, helping farmers supply product with regularity.”
The Rai’s business empire is expansive with interest in Ngano Wheat farms (Tanzania), Menengai Oil, West Kenya Sugar, Kinyara Sugar Works (Uganda), and Timsales which is also associated with the Kenyatta family.
The family made headlines last year when it purchased the debt-strapped PanPaper, promising to pump Sh6 billion into the factory over five to ten years.
Its Sukari Industries can produce up to 100 tonnes of sugar a day as well as 500 tonnes of bagasse and 52 tonnes of molasses. The planned expansion will see these production numbers increase significantly.
The expansion plan comes at a time when the industry is suffering from low cane production, high costs and stiff competition from cheap sugar imports.
The shortage of raw material has hit struggling State sugar millers particularly hard, but the better managed private firms have continued to thrive.
Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 800,000 tonnes.