County plans Sh1bn sugar factory in Western Kenya

KENYA – Kisii is looking to set up a Sh1 billion sugar factory in South Mugirango partly fuelled by a supremacy battle with neighbouring Narok and Migori counties.

The county administration has submitted an environmental audit report to the National Environment Management Authority outlining its plan for the project on 400 hectares near Nyangweta forest.

A near-similar project was announced earlier this year backed by Indian investors, Kanoria Group, but the report only names the county government as the proponent.

The report indicates that the sugar mill is mainly intended to provide a market for small-scale sugarcane farmers in the county who sell their produce elsewhere. “The farmers supply the cane to the existing factories (Sony, Ndhiwa and Transmara) which are all located in the neighbouring Migori and Narok counties,” the report reads.

 “It is for that reason that the Kisii County government through the Ministry of Agriculture identified a site in Nyangweta Forest to develop the proposed sugar factory.”

The sugar mill will also have a spirit distillery as well as co-generation of electricity for internal use and sale to the national grid.

The construction of the sugar mill is expected to intensify the competition for cane among the various factories in the region creating a scenario akin to that of western Kenya where West Kenya and Mumias Sugar are locked in a vicious battle for the raw material.

The report indicates that Kisii produces about 266,000 tonnes of industrial sugarcane. The main advantage expected by the farmers is the reduction in time and cost used to transport their produce to the neighbouring counties, thus maximising their returns.

The farmers have demanded that the factory deal with them directly to cut out the middlemen, ensure prompt payment, provide them inputs including seedlings, fertilisers and machinery.

Kenya has 11 sugar factories but most operate inefficiently due to obsolete machinery leading to waste of cane.

Kenya’s sugar industry has been reeling under the weight of high production costs and competition from cheap imports, most of which get in untaxed.

The country is a sugar-deficient and depends on imports to bridge the supply shortage.

May 19, 2016; http://www.businessdailyafrica.com/Corporate-News/kisii-plan-for-Sh1bn-sugar-factory/-/539550/3210706/-/tm76um/-/index.html

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