Pan Paper delays reopening to September

Pan Paper Mills will delay its reopening until mid September after running into upgrade delays.

The Webuye based paper mill which was acquired by the Rai Group in April, had scheduled to be back in business by August 30^th, but logistical challenges in acquiring new machinery and upgrading the facility have pushed back the re-opening.

On Monday, Pan Paper General Manager Y. V Choudray said the first paper mill was undergoing tests before being commissioned in September.

“Pan Paper as you are aware had many challenges. We are almost on time but there were a few setbacks but we should be in a position to bring back one paper machine by mid September,” Mr Choudray said.

Pan Paper shut down operations in 2009 under a mountain of debt and inability to operate efficiently due to aged machinery.

Tarlochan Limited, a subsidiary of the Rai Group, acquired the paper mill for Sh900 million in April with plans to inject an additional Sh6 billion over the next five years to have the plant back to optimal operation.

Among the outstanding debts by Pan Paper, was Sh150 million owed to Kenya Power, forcing the utility firm to disconnect the mill’s power supply.

Mr Choudray said the new owners had already cleared past debts and had already been reconnected to the grid. The paper mill is now working towards having its water supply reconnected by the end of the month to allow for the production of paper.

“These two are essential inputs for start up of the mill and we are confident we can have the water back to start production,” he said.

The Rai Group plans to modernize the plant, having successfully turned around South Paper Mills in Tanzania which it bought in 2005.

“We are working on our long term strategy that takes this mill to a sustainable level. We need to give this mill a new dimension,” Mr Choudray stressed.

Pan Paper has already reemployed 200 former employees to work at the mill. Plans are also in place to hire an additional 250 former employees once the mill is back in production.