By Dorothy Musyoka
In a significant milestone aimed at revitalizing Kenya’s struggling sugar industry, the government has concluded the leasing process for four state-owned sugar factories, awarding 30-year operational leases to private sector players following a broad-based and transparent consultation process.
According to a press statement by the Ministry of Agriculture and Livestock Development under the agreement the government settle arrears owed to both farmers and workers before the handover of the four factories to private millers.
“The Ministry of Agriculture and Livestock Development has entered into an agreement with sugarcane farmers and sugar factory workers unions to pay cane delivery and salary arrears owed to both farmers and workers,” read the statement.
The new lease agreements are as follows:
- Nzoia Sugar Company – Awarded to West Kenya Sugar Company
- Chemilil Sugar Company – Awarded to Kibos Sugar & Allied Industries
- Sony Sugar Company – Awarded to Busia Sugar Industry Ltd
- Muhoroni Sugar Company – Awarded to West Valley Sugar Company
These leases will run for a period of 30 years, during which the new operators are expected to rehabilitate, modernize and run the mills efficiently while ensuring a fair and stable relationship with local farmers and workers.
The leasing process is part of the broader public sector reform agenda to address inefficiencies in government-owned enterprises and promote sustainable agricultural production through public-private partnerships.
The government will closely monitor the implementation of lease agreements to ensure compliance with set obligations, including milling capacity expansion, factory modernization, and support for out-grower schemes.
The assets will be leased out to the lessees annually based on the prevailing market rate being collected by the Kenya Sugar Board for reinvestment into communities around the four factories.