Barons’ takeover of sugar mills sparks claims of industry capture and farmer losses
When the government decided to lease four public-owned sugar millers in Western and Nyanza regions in 2024, the aim was to end the financial losses, ensure farmers are paid promptly and mordernise factory machinery so as to ensure long suffering farmers begin to benefit from their sweat.
The leasing programme, which took effect on May 10, 2024, saw Nzoia Sugar Company was taken over by West Kenya Sugar Company Limited owned by Rai while Ali Ahmed Taib’s Busia Sugar Industry Limited took over Sony Sugar Company.
On the other hand, Chanan Singh Chatthe family ran Kibos Sugar & Allied Industries Ltd took over Chemelil Sugar Company while Muhoroni Sugar Company was acquired by West Valley Sugar Company Ltd owned by Kipchimchim Group of Companies associated with the late businessman and politician Samwel Ng’etich.
While West Valley Sugar is owned by Kipchimchim Group, which is allegedly associated to a senator, and Busia Sugar belongs to businessman Ali Ahmed Taib, the other two millers went to politically-correct Asian tycoons, which has often raised concerns on whether farmers’ and by, extension, public interest was ever a consideration in the dealings.
West Kenya Sugar Company, a dominant player in Kenya’s sugar industry, is owned by billionaire businessman Jaswant Singh Rai.
He is the chairman of the Rai Group, a conglomerate that also controls Kabras Sugar, Sukari Industries, Olepito Sugar, and Naitiri Sugar, even before the acquisition of Nzoia Sugar accounted for nearly 50 per cent of Kenya’s sugar production.
On the other hand, Kibos Sugar & Allied Industries Ltd is owned by Channan Chatthe family, whose founder second-generation Kenyan industrialist Chanan Singh Chatthe (now deceased) was succeeded by his sons, including Satwant Singh Chatthe, Sukhwinder Singh Chatthe and Ragbhir Singh Chatthe.
Government officials, including President William Ruto and his Agriculture Cabinet Secretary Mutahi Kagwe, have on many occasions touted the leasing as a game changer citing prompt payments to farmers and employees, commitment to investment in cane development initiatives and modernisation of factories.
However, according to a video shared on social media, Suba Member of Parliament (MP) who hails from the region says the situation on the ground is quiet different, terming the leasing a con game.
Caroli argues that during the leasing process, the government did not do a valuation of assets held by the factories, the nucleus estates or even sugar stocks in stores.
“What has happened is that those who leased the mills are not even milling sugar in the factories because they are conflicted. Everyone who was leased the mills has a mill near the public mill. So, what they do is to cut sugar from the nucleus estates and then go and mill it in their private firms. Why? Because they do not want to pay concession fee, which is based on the tonnage of the sugar they crush to the molasses produced. They have killed the economy,” Caroli added.
As a result, he said factory workers have been laid off, while the price of one ton of sugar has gone down from Sh5, 750 to Sh4, 800.
