Kenya to retain 80% of workers as state sugar mills transition to private management
The government pledges job security and improved efficiency as private investors take over operations of struggling State-owned sugar mills.
KENYA – The government will retain at least 80 percent of employees in State-owned sugar companies under the ongoing leasing of mills to private investors, according to Kenya Sugar Board (KSB) Chair Nicholas Gumbo.
Gumbo explained that the remaining 20 percent—mostly employees close to retirement—will be gradually phased out once their benefits are fully settled.
He emphasized that the measure aims to safeguard jobs and ensure a smooth transition as the government advances with privatizing key public sugar factories.
The State is leasing five major sugar mills, Nzoia, Chemelil, Muhoroni, Miwani, and South Nyanza (Sony), to private investors. The initiative is designed to enhance efficiency, productivity, and profitability across the sector.
“Once these mills operate at full capacity, sugar production could double to 1.6 million tonnes annually, positioning Kenya as a potential net exporter,” Gumbo stated.
He noted that cane farmers are already reaping benefits, with payments now issued weekly instead of monthly, a move expected to boost morale and encourage production.
The announcement comes amid tension from sugar unions, which have threatened industrial action if redundancy notices take effect on October 31, 2025.
The unions are demanding settlement of approximately Kes 5 billion in pending salaries and allowances before any restructuring proceeds.
Government officials have maintained that the leasing plan is crucial to reviving the sector’s competitiveness and sustainability. They assured that all redundancy and terminal benefits will be handled lawfully and transparently.
Two mills, Muhoroni and Sony, have already resumed operations, with weekly cane crushing volumes rising from 7,000 tonnes to 11,000 tonnes. Gumbo attributed this improvement to greater efficiency under private management.
“Before leasing, these mills were barely surviving. Now, they are processing more cane and generating profits,” he said.
Meanwhile, Chemelil and Nzoia sugar mills are undergoing phased rehabilitation and are expected to be fully operational by November. The Kenya Sugar Board has set an end-of-October deadline for the complete revival of all four mills.
According to the government, the success of the program hinges on private investors’ capacity to modernize equipment, streamline operations, and uphold fair labor and farmer practices. The reforms are part of Kenya’s broader goal to become a net sugar exporter by 2026.
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