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RentCo, West Sugar ink equipment lease deal

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RentCo CEO Robert Nyasimi speaks at the NSE last year. PHOTO | SALATON NJAU | NMG

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Summary

  • RentCo said the machinery comprising heavy duty tractors and cane loaders, among others, is part of the investments by the sugar firm to ease challenges associated with bulk cane harvesting and transportation.
  • The deal will help the Rai firm do away with the burden of buying and maintaining the equipment, freeing capex that will be diverted towards increasing cane production.
  • RentCo Africa has been providing leasing services to address equipment shortages in the agriculture, healthcare, energy, and food processing sectors since its launch.

Asset leasing firm RentCo Africa has inked a Sh600 million deal to rent farm equipment to Rai Group’s West Kenya Sugar Company which is looking to boost cane production.

RentCo said the machinery comprising heavy duty tractors and cane loaders, among others, is part of the investments by the sugar firm to ease challenges associated with bulk cane harvesting and transportation.

The deal will help the Rai firm do away with the burden of buying and maintaining the equipment, freeing capex that will be diverted towards increasing cane production.

RentCo Africa has been providing leasing services to address equipment shortages in the agriculture, healthcare, energy, and food processing sectors since its launch.

“The transaction was to a tune of 600 million for the financial year 2019-2020,” RentCo Africa chief executive Robert Nyasimi told the Business Daily.

“The equipment delivered includes semi-prime movers, tractors cane loaders and trucks. This was in partnership with Absa Bank Kenya #ticker:ABSA who stepped in as financing partners and various equipment dealers.”

Leasing to agricultural sectors is becoming the new norm in the wake of Covid- 19. The model helps firms to maximise their working capital on raw materials and human resources as RentCo takes up fleet management.

A Sugar Directorate report in June shows three brands owned by the Rai family controlled 45 per cent of the total sales in the six months to June.

This has grown from the 41 percent market share they held in the corresponding period last year.

West Kenya had the industry leading share of 29 per cent, while Sukari Industries accounted for 11 percent with Olepito at two percent of the total of 292,040-tonne sales reported between January and June.