The government has started the process of leasing five public sugar factories to private companies that will run the millers for 20 years in a fresh revival plan.
The Ministry of Agriculture and Crops Development put up Nzoia Sugar Company, South Nyanza Sugar Company, Chemelil Sugar Company, Muhoroni Sugar Company (in receivership) and Miwani Sugar Company (in receivership) for the lease.
The government owns a 98.8 percent stake in South Nyanza, 97.93 percent in Nzoia, 96.22 percent in Chemelil through the Agricultural Development Corporation (ADC) and 1.42 percent through the Development Bank of Kenya (DBK).
It also owns 82.8 percent stake in Muhoroni and 49 percent in Miwani.
“These sugar factories have a combined potential of 30 percent of the sugar market share in Kenya in a market currently standing at 1 million tonnes per annum,” said the Ministry in a Tuesday notice.
Successful bidders will control factories, office buildings, machinery, equipment, nucleus farms, staff and guest houses, schools, sports stadia and service contractor yards owned by the millers.
Most of the factories are old and use dilapidated equipment and machinery due to insufficient upgrades or maintenance which means that most operate below capacity.
The State is targeting to woo private companies to inject fresh capital into the struggling millers to not only grow their capacities but also maximise on diversification into cogeneration of export power, production of bioethanol and allied coproducts.
