West Kenya raises share of sugar output to 22pc

West Kenya Sugar Company has extended its industry leadership in production as the firm, owned by Jaswant Rai family, widened its market share to 22 percent in the first quarter.

The sugar miller raised its share from the corresponding period last year when its output accounted for 19 percent of the total production of the commodity in the country.

The firm, which produces and distributes the Kabras brand, saw its output rise to 31,000 metric tonnes in the first quarter, according to the latest Sugar Directorate data.

Private millers led the pack of highest performers with the former leader, western Kenya-based Mumias Sugar Company #ticker:MSC continuing to register dismal performance.

Mumias, in which the government has a controlling 20 percent stake and for a long time was Kenya’s largest miller, did not manage to produce a single tonne in the review period.

In the corresponding period last year, the miller processed a paltry 4,000 tonnes.

Ageing plant and shortage of raw material continue to pull down the listed firm.

State-owned Nzoia Sugar Company emerged the best among the five State-owned millers with the production of 9,290 tonnes followed by South Nyanza Sugar Company (7,360 tonnes), Muhoroni (6,305 tonnes) and Chemelil (2,863 tonnes).

On the other hand, private millers have installed new machines that are producing optimally and efficiently and enjoy relatively higher funding.

The Privatisation Commission is currently scouting for a transaction adviser to evaluate the five State-owned sugar millers in the latest attempt to sell the loss-making entities within the next 120 days.

The transaction adviser will assess the assets and liabilities of these firms and give the current position of their financial status.

The government plans to sell Sony, Chemelil, Nzoia, Muhoroni and Miwani to strategic investors in order to allow for the injection of new capital and stem losses.

The five millers are steeped in debt amounting to Sh100 billion, mainly due to mismanagement.

The commission is riding on political goodwill following the recent deal brokered between former Prime Minister Raila Odinga and governors in sugar cane growing zones, who had initially opposed the sale of the factories to private investors.