Govt to privatise five sugar firms

The government will begin the process of privatising five sugar firms in the next four weeks in a bid to reform Kenya’s struggling sugar industry.

Advertisements for expression of interest for the sugar millers will be published in a month’s time with the government seeking to sell its stake to strategic investors to turn around the struggling sugar companies.

In its much anticipated privatisation plan, the government is targeting strategic investors to buy its 51 per cent stake in Nzoia, Sony, Chemilil, Muhoroni and Miwani sugar companies.

A 24 per cent stake will be set aside for out-growers and employees.

The government hopes to inject better management practices into the millers to make them more competitive and profitable.

Inefficiencies defined by low production and escalating debt have brought the five companies down, with their combined debt rising to Sh59 billion.

The government has agreed to write off Sh33.7 billion with part of the balance being converted to equity.

The Kenyan Revenue Authority is equally expected to address tax related debt.

In March this year, the common market for Eastern and Southern Africa (COMESA) gave Kenya one more year to restructure its sugar industry ahead of the end of the duty free sugar importation safeguards that Kenya obtained from the regional trade bloc.

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kenya government Sugar sugar firms

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