Govt to privatize all government owned sugar factories

The government has Friday renewed its promise to privatize all Government owned sugar factories.

Speaking in Kisumu during a public sector owned sugar companies' privatization stakeholders' workshop, Agriculture Minister William Ruto said the Government was looking for serious investors who would inject sufficient capital to ensure profitability of the sugar mills.

Ruto, who was the Chief Guest, noted that sugar processing technology in the country's sugar factories was obsolete and investors will also be required modern the technology in order to enhance farmer's income.

He said new technology will not only improve on the crashing capacity of the sugar companies but also help utilize the by products such as ethanol and production of electricity.

Minister Ruto urged the farmers to get organized and buy shares from the factories either as individuals, groups or co operative's societies.

He said the Government will hold the shares to be allocated to farmers in trust they hold on to their stake in the five sugars factories set to be privatized.

"This time round the Government will not allow farmers to sell their shares to a few individuals who are not even farmers" he emphasized.

Ruto also singled out the sugar sub-sector as one that offers livelihood to over 6.5 million Kenyans directly and indirectly by generating sh. 28.3 billion of which sh. 10.7 Billion goes to the farmers directly.

"The sugar industry is the most important single industry in the region with over 169, 420 hectares under sugarcane out of which 90% is cultivated by small scale farmers numbering over 220,000" the Minister said.

The Minister noted that despite all this the industry is facing serious problems that have hindered its productivity but the Government was committed to turn around the sector that is still viable and ensure Kenya's sugar competitiveness in the international market.

The problems range from the industry being rain fed to the high cost of sugar production fed making its productivity internationally uncompetitive.

"It is for this reason that we had to seek for safe guards to protect the industry by charging 100% duty on imported sugar with an exception of a fixed amount from COMESA Market"

The variety of the canes was also pointed out to have low sucrose content as well as taking very long to mature.

The Minister informed the farmers that the Governments decision to privatize the companies was therefore a bold step to make them sustainable and survive into the future.

To pave way for the privatization to take place, the Government has promised to clean the balance sheets of the factories as well as reduce its shareholding to the minimum acceptable levels.

Ruto also said that his Ministry will continue its regulatory role and the management of the Sugar Development Fund to support research and develop the industry.

The meeting which was attended by farmers from the sugar belt region saw a poor attendance by the regions' legislators where only the M.P for Khanduyi Alfred Khan'gati was in attendance.

source: kbc.co.ke