The Multi-billion shillings worth Rai Group wants to acquire the country’s largest ailing miller Mumias Sugar Company to control the country’s sugar industry.
The Western Parliamentary Group Caucus Chairman, John Bunyasi says there are covert and overt deliberate and systematic machinations and manipulations clearly indicating that the Rai Group was keen to acquire Mumias Sugar once it falls under the hammer of auctioneers.
Mr. Bunyasi said: “What is emerging is that this Group (Rai) wants to establish a monopoly in the country’s ailing sugar industry. That is just part of the challenges Mumias Sugar and the entire sub-sector are facing. However the most critical factor is the millers’ ability to promptly pay sugarcane farmers their dues for cane delivered.”
He went on: “This will restore the farmers’ confidence to supply the miller(s) whatever little cane they have. The pricing per tonne should also be attractive, otherwise we have a big problem.”
The Nambale legislator who is also a member of the Parliamentary Committee on agriculture said parliament had already approved the privatization of the existing state corporations in the milling business and the Rai Group had also shown interest in these corporations.
The Corporations being targeted by the billionaire include Nzoia Sugar (Bungoma County), Chemilil, Miwani, Muhoroni (Kisumu County) and SONY (Migori County all of them starved of sugarcane supplies just like Mumias Sugar.
This development comes hardly a year after the same Group the largest Paper manufacturing plant in East and Central Africa, Pan-Paper Mills Ltd in Webuye town of Bungoma County at Kshs. 900 million when the company and its properties is worth more than Kshs. 18 billion because it was grounded over a debt of Kshs. 6 billion.
Currently according to the Agriculture Food and Fisheries Authority (AFFA) statistics the Rai Group one of the latest entrants into the sugar milling business owns West Kenya aka Kabras Millers (Kakamega County) whose milling factory machines, the group bought from Mumias Sugar’s mill “B”, West Kenya Olepito (Busia County), Sukari Millers (Migori County) and Kinyara Sugar Company in Uganda.
They show that the other private millers in the sub-sector are Kibos Sugar in Kisumu County, Butali Kakamega County, Kwale International Sugar Company of Kwale County and the latest entrant Busia Sugar Industries (BSI) whose commissioning has been delayed by more than a year because of crippling legal battles attempting to stop its construction.
Recently the Rai Group has been in the media over the importation of poisoned “unfit for human consumption sugar” that whose huge consignments were recovered from godowns in Eastleigh Nairobi and Pan-Paper factory warehouses in Webuye Bungoma County and which some of it results from the government chemist show that they contain mercury, lead and copper.
The Directors Jaswant and Tajveer Rai were forced to appear before the joint parliamentary Committees investigating the massive cheap contaminated sugar into the country’s market duty free.
Mr. Bunyasi says that committees had established that 2 million tonnes of illicit sugar was imported to meet a domestic deficit of only 200, 000 tonnes with Sony Sugar being used to import 50, 000 tonnes worth Kshs. 3 billion.
“As leaders from the western Kenya region we realized that the problems affecting Mumias Sugar Company are more complex than meets the eye, but worse using the ailing entity for milking illicitly money advanced to it for recovery programmes,” said the Chairman Western Parliamentary Caucus.
He said it was a big shame that after Parliament approved Kshs 3.7 billion bailout programme for the company, some political leaders from the region and outside started piling pressure on the then Chief Executive Officer (CEO) Errol Johnson to release some of the monies to them in batches of millions of shillings in the run up to the last general elections.
Mr. Bunyasi said: “The pressure on the CEO for this money was so much that he was forced to take leave out of the country and never came back to steer the company back to recovery. It is also not good that since the exit of immediate former Nairobi Governor Evans Kidero there has been an extremely high turnover of CEOs starting from Peter Kebati Kidero’s successor to the recent Nashon Aseka.”
He said preferably to resuscitate Mumias Sugar, its management should be taken over by a completely independent entity with a heavy capital outlay to invest not only in cleaning up the entire management and its bad practices but also restoration of the farmers’ confidence and sugar development programmes which collapsed years ago.
The legislator argues that the company’s CEO should be a highly qualified and experienced marketing professional who knows the ropes of dealing with people, the government and corporate entities all round, but not necessarily a professional who studied and is experienced in the technical aspects of the sugar business.
He says the sugarcane poaching crisis that is still gripping the sub-sector in a stranglehold is just part of the larger schemes to grab Mumias Sugar by the Rai Group by exploiting its glaring weaknesses.
The Sugar industry experts are now questioning why the Rai Group has strategically positioned itself along the Kenya- Uganda border considering its ownership of the Kinyara Sugar Company in Uganda whose products are being smuggled into Kenya through the porous common border.
