Nzoia Sugar Factory Embarks On Privatization Journey To Revitalize Kenya’s Sugar Industry

In a significant move signaling a new chapter for Kenya’s struggling sugar industry, the management of Nzoia Sugar Factory has confirmed that the long-awaited privatization process is officially underway. This marks a bold step toward revitalizing the sector, which has faced numerous financial challenges over the years.

During a press briefing on Thursday, Nzoia Sugar Company Chairman, Alfred Khang’ati, revealed fresh details about the ongoing privatization, assuring stakeholders of transparency and the protection of workers’ and farmers’ interests. Khang’ati explained that the government’s decision to lease the state-owned sugar mill is part of a broader national initiative to reform the industry and address the persistent financial and technological setbacks that have hindered growth.

Khang’ati emphasized that Nzoia Sugar is not alone in this transition. Other state-owned mills, including Muhoroni, Chemelil, and Sony, are undergoing similar privatization processes. The chairman noted that discussions on privatization have been ongoing since President Daniel arap Moi’s era, with the issue resurfacing under successive administrations. “Now, Nzoia is next in line,” Khang’ati confirmed.

The privatization plan involves the government stepping back from direct management, allowing private investors to lease the mill and inject the much-needed capital to revamp operations. Khang’ati acknowledged that this shift would mark the end of his tenure as chairman, but he underscored that the focus of the board remains on safeguarding the welfare of employees, farmers, and the surrounding community.

“Many of our employees have gone unpaid for over two years. Pensioners who dedicated their lives to this company deserve dignity. The factory may change management, but the soul of Nzoia—its workers, farmers, and the community—should not be forgotten,” Khang’ati said.

The move follows recommendations outlined in the Oparanya Taskforce report commissioned in 2017 under President Uhuru Kenyatta. The report highlighted the financial challenges facing the sector and advised the government to exit sugar production. This recommendation has been backed by governors from 13 sugar belt counties, including Bungoma, who believe privatization is the best way forward.

The chairman acknowledged that Nzoia Sugar’s financial situation has deteriorated, and the mill’s technological capacity is outdated, making it difficult to compete with modern private millers such as West Kenya and Butali. Khang’ati stressed that only a substantial capital infusion could restore the factory to its former glory.

Managing Director Hezron Kotut confirmed that the privatization process officially began on February 28, with an international tender being announced. Tender openings took place this week, with private investors now able to bid for the lease of the factory.

The lease model will see private investors pay concession fees, lease rentals, and goodwill payments based on the mill’s extensive assets, including over 4,600 hectares of land, staff housing, schools, and a stadium. The government plans to use the proceeds from the lease to settle the pending arrears owed to staff and improve the company’s financial standing.

In a bid to ensure a transparent process, Khang’ati revealed that a multi-agency committee has been formed to oversee the privatization. The committee includes representatives from workers’ unions, farmers’ associations, and other stakeholders to guarantee fairness and transparency in the leasing process.

Acknowledging the mistrust surrounding privatization in Kenya, particularly following the collapse of Mumias Sugar and the Webuye Pan Paper factory, Khang’ati assured the public that the process would be handled with utmost integrity. “We understand the public’s anxiety. Kenya’s privatization history has its scars. That is why we insist on transparency, integrity, and above all, the protection of those who built this company,” Khang’ati said.

He also emphasized that Nzoia Sugar’s land and community assets will remain within Bungoma, ensuring that the local community will continue to have a stake in the company’s future.

With the privatization process now in full motion, stakeholders are hopeful that this move will breathe new life into Nzoia Sugar and the broader Kenyan sugar industry, ensuring a more sustainable and competitive future for all involved