Companies

Kwale sugar miller weathers drought to earn Sh75m profit

kwale

The Kwale International Sugar Limited factory. FILE PHOTO | NMG

Kwale International Sugar Company (KISCOL) posted a Sh75 million profit for the financial year ended December, 2017, weathering severe drought and prolonged electioneering.

The firm moved against the loss-making wave by State-owned sugar millers to bounce back from Sh618 million loss it posted in 2016.

Sugar miller Mumias, which has been Kenya’s biggest millers for decades until recent years, posted a net loss of Sh1.95 billion in the six months ended December.

The Kwale-based company is jointly owned by a Mauritius sugar miller, Omnicane, and Kenyan family-owned company Pabari Investments Limited. Kiscol started operations in December 2014 with a factory crushing capacity of over 3,000 tonnes of cane per day.

“In respect of KISCOL, it was a difficult year as Kenya was hit by a severe drought at the start of 2017 and the date scheduled for the general elections delayed the start of the crop. Despite this, we have been producing 19,475 tonnes of sugar, all of which has been sold on the local market,” said Omnicane, Kiscol’s parent company chief executive officer Jacques d’Unienville.

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“We are working closely with our partners in Kenya, Pabari Investments, to ensure that we continue to improve the cane cultivation and bulk water supply. It is a bit early to estimate the cane supply for 2018. However, I can say that the potential of this project is huge and we now have to get a maximum of canes to the factory to reach our cruising speed in the next two years,” said Mr d’Unienville.

The sugar industry in Kenya is beleaguered by mismanagement whereas in Mauritius it is exceedingly competitive courtesy of modern production technology.

Kenya currently has 12 millers, but the industry is dominated by loss-making State-owned sugar firms such as Mumias, Nzoia, Sony, Muhoroni and Chemelil which owe the government billions in debt.

Private firms including West Kenya, Soin, Kiscol, Kibos, Butali, Transmara and Sukari have however been eating into the State miller’s market share and are now the leading producers of the sweetener.

India’s Bajarambapu Group in 2013 signed an agreement with the Narok county government to construct a Sh10 billion sugar factory in TransMara.