Panpaper Mills in Webuye. The billionaire Rai family bought the collapsed Pan Paper Mills for Sh900 million, paving the way for re-opening of the factory that closed in 2009. Photo/FILE
What you need to know:
The joint receiver managers will now be working with the incoming owners over the transition period even as they process and settle employees’ arrears for the receivership period.
The investors say they plan to pump in Sh6 billion in the next five to 10 years to revive the plant, with production expected to begin August 30.
The new owners of the Webuye-based Pan Paper Mills, the Rai Group, have taken control of the factory and announced the start of machinery upgrades in readiness for production in the coming months.
The handover by the joint receivers, PriceWaterhouseCoopers, effectively puts the assets and a workforce of nearly 150 in the hands of Tarlochan Limited, a subsidiary of Rai group of companies.
The billionaire Rai family bought the collapsed Pan Paper Mills for Sh900 million, paving the way for re-opening of the factory that closed in 2009.
The investors say they plan to pump in Sh6 billion in the next five to 10 years to revive the plant, with production expected to begin August 30.
“The handover process provides an opportunity for us to re-asses the plant and equipment. From our initial assessment, most of the critical machinery will require total replacement and technological upgrades to ensure that we can start operations within this calendar year,” said Rai Group Chairman, Jaswant Rai.
PanPaper Mills adds to the Rai’s business empire which includes several sugar industries, a plywood firm, an edible oil refinery and paper and wheat milling.
Employees arrears
They have interests in Ngano Wheat farms (Tanzania), Menengai Oil, West Kenya Sugar, Kinyara Sugar Works (Uganda), Sukari Industries (Kenya) and Timsales, which is also associated with the Kenyatta family.
Among the assets that the investors have received are buildings, land and equipment.
The joint receiver managers will now be working with the incoming owners over the transition period even as they process and settle employees’ arrears for the receivership period.
“The handover is a lengthy process and we shall remain in the transition period to assist the new investors as they take over the management of the plant and the facilities associated with Pan Paper,” said joint receiver and manager Muniu Thoithi.
The Rai Group in a statement said that the revival of the paper mill will be modelled along a similar project in Tanzania where the investor took over South Paper Mills and restarted operations in April 2005.
In an earlier interview last week, Mr Rai said that they also plan to put up a power plant that will use the mill’s by-products to cut energy costs.
Pan Paper is said to have closed as a result of accumulated power bill which had risen to Sh150 million by 2010.
This is the second attempt at reviving the mill with the first effort by the government in 2010 lasting only a few months.
The incoming investors have said they will give priority to the absorption of current and former Pan Paper workers, offering good news for the area residents where many people lost jobs or business deals when the firm collapsed more than a decade ago.
