Mumias Sugar: State To Bring New Investors To Take Over Miller As Jaswant Rai Withdraws Case

• President William Ruto put sugar cartels on notice, warning them that they had three options to choose from
• Ruto said a new management model will eliminate the thorny issue of incompetence in the sugar sector in Kenya
• Billionaire Jaswant Rai withdrew the case against Mumias Sugar after the president linked him to a group of sugar cartels

The government is set to bring in new private investors to take over the struggling Mumias Sugar Factory to revive the sector.

During his tour of Western Kenya, President William Ruto announced plans to invite new investors, indicating Uganda's Sarrai Group could be kicked out despite securing a 20-year lease.

The president declared war on sugar cartels, whom he accused of exploiting farmers and consumers.

"A new management model with a sharp eye on serving the public and farmers will eliminate the thorny issue of incompetence that has cracked the operation of our sugar firms.

We will put money in cane development and acquire new mills in our bold move to placing cane farming back on the profitability path. We must get it right this time,"Ruto said.

Why Jaswant Rai withdrew Mumias cases

West Kenya Sugar Company under Jaswant Rai had sought to take over its struggling rival Mumias Sugar on lease terms.

However, KCB, which had entrusted itself as the administrator of the mill, charged Sarrai Group from Uganda with running the miller for 20 years.

Jaswant, who was against the lease being granted to Sarrai, had enlisted himself among the respondents in the case against Mumias in the appellate court.

He withdrew the case after President William Ruto linked him to a group of sugar cartels, frustrating the government's efforts to revive the industry.

Rai applied to remove his case against Mumias Sugar Company at the appellate court.

What's the cost of sugar in Kenya?

Data from the National Bureau of Statistics (KNBS) showed that in July, food and fuel prices increased by 8.6% and 14.5%, respectively.

Prices continued to rise following a drop in sugar supply, even as the government halted the local sugarcane milling in Western Kenya.

A spot check by TUKO.co.ke indicated that 1kg of sugar retailed at between KSh 240 and KSh 260, up from an average of KSh 200 in May 2023, across supermarkets and small retail shops.

A 2kg packet sold for around KSh 490 to KSh 510, crossing the KSh 500 mark for the first time in the country's market history.

The government introduced an excise duty of KSh 5 per kilogramme of imported sugar in the Finance Act 2023, which was recently implemented.