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The Bitter-sweet Takeover Of Mumias Sugar By Uganda’s Sarrai Group

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Uganda-based conglomerate Sarrai Group has won the bid to run the ailing Mumias Sugar miller for 20 years, beating Kenyan billionaires who were eying the miller.

The group had the third-highest bid of Ksh11.5 billion, less than half the price placed by self-declared billionaire Julius Mwale of Ksh27.6 billion, who was the highest bidder.

Other notable figures who had placed their bids include Jaswant Rai and his siblings, who offered Ksh3.5 billion and steel tycoon Narendra Raval who placed a bid of Ksh8.4 billion.

Sarrai Group, despite being based in Uganda, is associated with Kenyan businessman Sarbi Singh Rai, a member of the famous Rai Family.

Sarrai Group runs several agro-manufacturing companies, with three sugar factories in Uganda producing about 170,000 tonnes of sugar annually. It also has operations in Malawi.

The lease excludes assets in the firm’s ethanol and power generation plants, which are currently under Ecobank and French development financier, Proparco, which are owed Ksh2 billion and Ksh1.9 billion respectively.

Mumias sugar was placed under receivership by KCB Group in September 2019 to protect its assets and maintain its operations, after the miller sank into consistent losses.

Mumias’ current receiver and court-appointed administrator, Ponangipalli Venkata Ramana (PVR Rao) said that the lease is in the interest of all stakeholders

“I hereby confirm awarding the Leasing of the assets belonging to Mumias Sugar Company Limited (in receivership and under Administration) [MSCL] to Sarrai Group, Uganda,”PVR Rao said.

Sarrai Group Chairman, Sarbi Singh Rai said the firm’s immediate focus is investing in the réhabilitation of the machinery back to effective operational status, and engaging outgrowers and an experienced workforce to ensure that there is an effective collaboration to revive the factory.

“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.

Companies under Sarrai Group include Uganda’s Engaano Millers, producers of wheat flour, bread and animal feeds and Ustawi Grain Millers in Mombasa.

The group also boasts of 20,000 hectares of its own nucleus estates in Uganda, with a sugar production that includes Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar.

Mwale has however promised a bruįsing battle in the fight for control of Mumias Sugar, which was once the biggest sugar miller in Kenya.

“We are moving to court immediately to challenge this process because the receiver-manager was not transparent in his evaluation of the bids. I am confident that the court will stop this process given that there is enough evidence to show that the process was flawed,” said Mr Mwale in an interview.

Read: Mumias Sugar Fįres All Employees

>>> As Mumias Sugar Stares at Slow Death, Investors Count their Losses

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FRANCIS MUTINDA
FRANCIS MUTINDAhttp://www.businesstoday.co.ke
FRANCIS MUTINDA is a content creator and editor with Business Today. Email: [email protected]
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