KENYA – Kibos Sugar is preparing to relocate its industrial Kenyan sugar refinery plant to Rwanda’s special economic zone in a bid access the regional market, alleging stringent regulatory challenges the country.
The decision comes after the Kenyan government failed to grant the company special economic status, hindering its ability to export duty-free.
“We are planning to relocate the plant to Rwanda where we have been allocated land by the government within the special economic zone,” a senior official from Kibos revealed.
The move signals a setback for Kenya, challenging its reputation as an attractive investment destination.
Kibos has struggled to commission its Ksh200 million facility, with an installed capacity of 150,000 tonnes, due to stringent trade laws governed by the East African Customs Management Act.
Under current regulations, goods produced from duty-free imported raw materials face taxes when exported to East African Community (EAC) member countries, rendering Kibos’ products uncompetitive in the market.
This forces Kibos, the sole company with an industrial sugar plant in Kenya, to consider importing raw sugar from countries like Brazil or India for processing.
Jude Chesire, Head of the Sugar Directorate, acknowledged providing support to Kibos but noted that addressing duty-related issues falls under the jurisdiction of regional trade ministers.
The news come when sugar imports in the country dipped to a seven-month low in February 2024, a reflection of a significant rise in domestic sugar production.
This surge in domestic production is credited to the government’s decision to lift the five-month ban on sugar imports in December 2023. The ban was implemented to allow cane to mature and meet the processing needs of local factories.
Data from the Sugar Directorate shows that sugar imports reached 42,381 tonnes last month, marking the lowest level since July 2023 when the country imported 27,179 tonnes.
Kenya, a net importer of refined sugar primarily used in confectionery and beverage production, imports up to 150,000 tonnes annually to meet domestic demand.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
