Kenya Sugar Board warns private millers over factory leases
Private investors risk losing leases to state-owned sugar mills if they fail to modernise and support cane farmers.
KENYA – The Kenya Sugar Board (KSB) has issued a stern warning to private investors who have leased four state-owned sugar factories, stating that their 30-year leases will be revoked if they fail to meet agreed performance conditions.
The directive aims to safeguard the interests of farmers and ensure the revitalisation of the sugar industry.
The four mills — 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. The government initiated the leasing strategy to breathe new life into Kenya’s struggling sugar sector.
Speaking during a stakeholder meeting in Nairobi, Jude Chesire, Chief Executive Officer of the Kenya Sugar Board, emphasised that the primary focus of the leasing agreements is the welfare of sugarcane farmers.
He underlined that failure to meet key obligations, including modernising old mills, supporting cane development, and ensuring timely farmer payments, would lead to lease termination.
“Farmers come first,” said Chesire. “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.”
Chesire further stated that the lease and concession fees paid by investors will be redirected to sugarcane farmers through annual bonuses. These bonuses will be based on the volume of sugarcane each farmer supplies to the factories.
In response to the directive, Nzoia sugar farmers have welcomed the government’s move to lease the factories to private players. They expressed optimism that the arrangement would lead to improved payments and a more sustainable farming environment.
The farmers also dismissed criticism from some Western Kenya leaders opposing the leasing plan.
The leaders have argued that the lease is illegal and would adversely affect the regional sugar industry, despite a court order issued on April 23 halting the lease to businessman Jaswant Rai.
However, the farmers contended that these politicians had done little to assist them while in office and voiced support for the government’s intervention to revive the ailing sector.
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