Investors to build US$11.3M sugar factory in Siaya as Kenya expands local sugar production
The proposed sugar mill will source cane from thousands of outgrowers, produce 138 tonnes of sugar daily and generate captive power to support its operations.
KENYA – A group of investors is planning to build a KES1.46 billion (US$11.3 million) sugar factory in Siaya County, further expanding Kenya’s sugar processing capacity as investment in the country’s sugar industry continues to grow.
The proposed development will establish a new greenfield sugar mill designed to support local farmers, increase sugar production and diversify revenue through by-product utilisation.
According to Nation Africa, the investors behind Kipenzi Sugar Limited intend to establish the factory in Mur-Malanga sub-location within Alego Usonga Sub-county.
The project will feature an initial sugarcane crushing capacity of 1,250 tonnes per day (TCD), with plans to expand operations to 2,500 TCD in the future.
The proposed facility will also include a 1,250 TCD vacuum pan sugar processing mill capable of producing approximately 138 tonnes of sugar per day, equivalent to about 3,250 tonnes per month. In addition, the plant will generate three megawatts of captive power to support its operations.
Project documents indicate that the factory will rely entirely on sugarcane supplied by contracted farmers rather than developing company-owned plantations.
“The proponent has no plans for nucleus estates as he will depend on sugarcane bought from the registered farmers. However, there is enough land for the factory and associated amenities and the proponent intends to acquire more land in the future,” the filings state.
The company has already acquired 17.5 hectares of land for the development. Farmers cultivating an estimated 10,000 hectares of sugarcane have been identified as potential suppliers, with the factory expected to source cane primarily from outgrowers located within a 15-kilometre radius.
“The factory will be designed to encourage the out growers falling within 15 Km radius to produce sugar cane by aiding in land preparation and seed and fertilisers at an agreed cost between the farmer and the factory and this will cover mainly Bar Olengo location and the larger Alego Usonga subcounty,” the investor said.
Beyond sugar production, the project aims to maximise value from processing by-products. Bagasse and molasses will be used to support mill operations and electricity generation, while excess bagasse is expected to be converted into charcoal briquettes, fertiliser, paper or chipboards under future expansion plans.
“It will utilise a minimum of 30 cubic meters of water/hour from River Yala which it will pump and treat in its own water treatment plant. The operational phase of the project will involve the production of mill brown sugar with bagasse and molasses being produced as by-products,” the filings state.
The investment comes as Kenya continues efforts to strengthen domestic sugar production. Recently, Parliament increased the sugar import levy from KES4 (US$0.031) to KES40 (US$0.31) per kilogramme, a measure intended to revive the local sugar industry and protect domestic producers from unfair competition.
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