Agriculture Cabinet Secretary Mutahi Kagwe has assured Kenyans that the government will retain full ownership of the four public sugar factories even after leasing them to private companies for 30 years.
He told Parliament that any upgrades made by the private millers, including new machinery or expanded facilities, will automatically revert to the government once the lease expires.
Kagwe explained that the leasing agreements come with strict performance conditions. The private companies must revive the factories, improve efficiency and modernise equipment.
He noted that the entire process is guided by the Sugar Act 2024, which created the Kenya Sugar Board. The board has wide powers to supervise cane development, harvesting, milling operations, and to protect the interests of farmers.
He emphasised that both the Kenya Sugar Board and the Competition Authority will closely monitor the mills to prevent market dominance.
“Following the leasing of the four state-owned sugar mills, none of the sugar companies controls more than 50 per cent of the market,” he said.
He reminded Parliament that the Competition Act prevents any single company from holding excessive control of the national market.
The Cabinet Secretary said that the money gained from leasing the mills is intended to directly benefit cane farmers. The proceeds will support farmer bonuses and fund cane development programmes.
He explained that the government is moving away from managing mills directly and will instead focus on regulating and enabling the sector.
The four sugar factories, which include Nzoia, Chemelil, Sony and Muhoroni, have been leased to West Kenya Sugar Company, Kibos Sugar and Allied Industries, Busia Sugar Industry and West Valley Sugar Company.
The private operators are required to invest in cane growing programmes, rehabilitate old factory machinery and adopt new technologies that will improve production.
Kagwe also stated that the companies must diversify their operations. They are expected to venture into power generation, bioethanol production and other related products.
They must also maintain their estates and support out-grower farmers to ensure a steady supply of cane.
The Cabinet Secretary said that leasing the mills represents a major shift in how the government approaches the management of public sugar assets.
He described the new model as a long-term plan aimed at bringing in private investment, boosting production, reducing losses, protecting farmers and creating new jobs while restoring the sugar industry to profitability.
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