A Kwale-based sugar company has begun testing its new factory ahead of full-scale commercial production next month, coinciding with expiry of Kenya’s sugar import quotas which have been shielding local firms from competition.
The Kwale International Sugar Company Ltd (Kiscol) said it would officially open its plant, built where the collapsed Ramisi Sugar factory was located, in February.
The Sh17.8 billion ($200 million) Kiscol factory is expected to have capacity to mill 3,000 tonnes of cane a day, an 18-megawatt bagasse-fired power plant and an ethanol plant with capacity to produce 50,000 litres per day.
“We plan to start production sometime in February, trials are ongoing,” said Harshil Kotecha, director of Kiscol projects.
The plant is scheduled to begin full production at a time when Kenya is making its fifth application to extend the Common Market for East and Southern Africa sugar import quotas, saying the local industry is unable to compete with cheap sugar from the economic bloc.
Kiscol is banking on its modern, diversified factory and the fact that sugar cane at the Coast takes 12 months to mature compared to 18 months in western Kenya to take on its competitors.
Mauritian sugar manufacturer Omnicane owns a 25 per cent stake in the Kwale sugar miller. Kiscol is 75 per cent held by family-owned investment company, Pabari Investments.
Kiscol will be Kenya’s 12th sugar miller in an industry dominated by loss-making and debt-laden State-owned sugar firms such as Mumias, Nzoia, Sony, Muhoroni and Chemilil.
The private players in the sugar industry include West Kenya, Soin, Kibos, Butali, Transmara and Sukari industries.
Kiscol is currently in talks with Kenya Power to sign a power purchase agreement that will see the miller feed electricity to the national grid. It will be Kenya’s second sugar miller to generate power using cane bagasse after Mumias.
Mumias Sugar has a bagasse power plant with a capacity to produce 34MW of electricity of which 26MW is supplied to the national grid. But erratic cane supply has affected the electricity production plant.