Sugar millers to continue competing for Kenya’s market despite Sarrai’s entry 

Uganda sugar manufacturers have said they will continue to compete for the Kenyan market even after Sarrai Group, which operates three sugar factories in the country, announced on Wednesday that it had won a 20-year lease to operate the assets of Mumias Sugar Company.

Mumias had until 2019 when KCB, one of the shareholders placed it under receivership, been one of Kenya’s largest sugar millers but a troubled balance sheet made it impossible for it to operate, opening it up to liquidation due to growing debts.

In an interview on Wednesday, Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairman, told Daily Monitor that whereas the sector welcomed Sarrai’s entry into Kenya, Ugandan millers would continue to compete for the share of the country’s sugar market.

“We shall still compete for Kenya’s market because of its competitive advantage. Sarrai’s entry is good for Uganda but that does not stop us from competing to sell our sugar there,” he said.

Uganda has a provision to export at least 90,000 tonnes of sugar to Kenya. However, this has been disrupted by a long-standing trade war, which the two countries early this week said had been resolved after a day of dialogue.

On Wednesday PVR Rao, the Mumias Sugar receiver manager, announced that Sarrai Group had won a 20-year lease to operate assets of Kenya’s sugar giant after beating five others in a four month bidding process. 

Rao indicated that Mumias assets, which excluded the ethanol and cogen plants, had been leased to Sarrai Group in the interest of all stakeholders and in conformity with the desire to revive the heavily indebted miller.

Mumias has been in receivership since 2019 after KCB, which holds a 1.27 percent stake, appointed Rao as the company’s receiver manager.

Sarrai Group is a Ugandan based conglomerate of diverse and inter-related agro-manufacturing companies with interests in some of Uganda’s largest sugar manufacturing companies, among which include Kinyara, Hoima Sugar, and Kiryandongo Sugar.

The three have a combined sugar installed capacity of 19,000 tonnes (crushed per day), producing more than 170,000 tonnes per annum.

Mr Sarbi Singh Rai, the Sarrai Group chairman, on Wednesday said their immediate focus will be to invest in the rehabilitation of Mumias’machinery back to effective operational as well as engaging out growers to ensure that there is effective collaboration.