Kenya Sugar Board threatens to cancel leases for investors who fail to meet guidelines
This comes after the government leased these four factories to revive the struggling sugar industry. The mills, which include Nzoia, Chemilil, Sony, and Muhoroni, have been leased to West Kenya Sugar Company, Kibos Sugar & Allied Industries, Busia Sugar Industry, and West Valley Sugar Company, respectively, for a 30-year term.
The Kenya Sugar Board has warned that leases for four state-owned sugar factories will be terminated if the private investors fail to meet certain conditions, including the modernisation of mills, support for cane development, and ensuring timely payments to farmers.
This comes after the government leased these four factories to revive the struggling sugar industry.
The mills, which include Nzoia, Chemilil, Sony, and Muhoroni, have been leased to West Kenya Sugar Company, Kibos Sugar & Allied Industries, Busia Sugar Industry, and West Valley Sugar Company, respectively, for a 30-year term.
Speaking during a meeting in Nairobi, Jude Chesire, the CEO of the Kenya Sugar Board, emphasised that the leasing model was created with a focus on farmers.
He stressed that failure by investors to meet the required obligations would result in the termination of their leases.
Chesire explained that the long-term lease is intended to justify the significant capital investment expected from the private investors. He highlighted that the lease and concession fees paid by the investors would be directed back to the farmers, with annual bonuses based on the amount of cane each farmer supplies.
“Farmers come first. If investors leasing sugar factories fail to modernise mills, support cane development, or pay farmers weekly as agreed, the government will revoke their leases. A 30-year term is only justified by the heavy capital injection expected,” he said.
“If they don't deliver, we’ll hand it over to those who truly prioritise our farmers. For every kilo of sugar processed, the lease and concession fees from the four investors will flow back to the farmers,” he added.
However, the takeover of the Nzoia Sugar Factory has sparked protests from leaders in the Western region.
Democratic Action Party–Kenya (DAP-K) leader Eugene Wamalwa, Trans Nzoia Governor George Natembeya, and politician Cleophas Malala led hundreds of sugarcane farmers and residents in a demonstration, opposing the leasing agreement.
The leaders argued that the lease was illegal and would harm the region’s sugar industry, despite a court order issued on April 23 that halted the lease to businessman Jaswant Rai.
“We must get to the bottom of this for the sake of our people. The Nzoia Sugar Company is a critical economic pillar for Western Kenya, supporting over 45,000 farmers and providing livelihoods for millions directly and indirectly,” Natembeya said.
“I perceive the privatisation or leasing of this institution as a menace to the region's economy, particularly given its pivotal role in supporting sugarcane farmers and local communities.”
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