Uganda’s Sarrai Group has secured the lease for assets of Mumias Sugar Company and the mandate to revive the collapsed sugar miller.
Mumias Sugar Company receiver-manager Ponangipalli Rao announced Wednesday that the Ugandan company emerged as the winner of the bidding process that has lasted over 4 months.
“I hereby confirm awarding the Leasing of the assets belonging to Mumias Sugar Company Limited (in Receivership & under Administration) [MSCL] to Sarrai Group, Uganda.” He said in a statement
“The Lease is in the interest of all stakeholders and in conformity with the recent Court ruling dated 19th November 2021.” He added
Rao disclosed that although Sarrai Group is not in sugar production in Kenya, it has a proven track record of running three sugar factories, a distillery, and power generation in Uganda.
He said the company has demonstrated commitment to commence rehabilitation of assets immediately to ensure the revival of operations within the shortest period.
The outlook to shareholders will be another talk since Mumias Sugar was suspended from trading on the Nairobi Securities Exchange in 2019 after the company was placed under administration by KCB Group Plc over unpaid loans the firm owed to the bank.
“Sarrai Group has a strong presence in the sugar industry in Uganda, but not in Kenya. The Group’s sugar production includes Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar with all three based in Uganda.” He said
“With over 20,000 hectares of its own nucleus estates in Uganda, the Group’s sugar production includes Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar with a total installed capacity of 19,000 TCD (tonnes crushed per day) producing over 170,000 tonnes of sugar per annum and over 12,000 registered and supported outgrower farmers being supported by various activities.” PVR Rao said
Soon after the announcement was made, Sarrai Group Chairman, Mr. Sarbi Singh Rai outlined the firm’s immediate focus. He said investments will be made to rehabilitate the machinery back to effective operational status as well as engagements with outgrowers and an experienced workforce to ensure that there is an effective collaboration to revive the factory.
Serrai Group Chairman on Mumias Sugar Co Lease
“Mumias sugar was the most respected sugar company not only in Kenya but the entire region and it is our firm commitment to all the stakeholders that we shall use all our experience and resources to make sure that we revive the company and take it back to the heights it once enjoyed,” he said.
With a new owner now on board, Rao said the revival of Mumias Sugar Company Limited will enhance the standard of living of the local community and catalyze growth in the area.
“We hope to see the original glory of Mumias back soon. I thank the Judicial System, National Government, County Government, Local Leaders, my team and the local community for extending warm support in concluding the revival plan to this level.” Rao said
Sarrai Group is a conglomerate of diverse and inter-related agro-manufacturing companies, with over 20,000 employees, across East and Southern Africa, with operations in Uganda, Kenya and Malawi.
Some of the firms that had placed bids for Mumias include Pandal Industries, KE International (US), West Kenya Sugar, Sarrai Group (Uganda), Krumen Finances, New Mumias Sugar/Devki Group, Kibos Sugar and Fredrick Coombes/ Sucriere Des Mascareigmes Ltd.
Companies like Devki Group owned by billionaire Narendra Raval had withdrawn its application, citing irregularities with the process and interference from politicians.