Mumias Sugar Company, located in Mumias, Kakamega County was one of the largest sugar processing companies in the country, serving the whole of East Africa.
It was a source of livelihood to people in the region and created jobs for close to 2,000 households. Founded in 1971, the company, however, now lies in ruins, with no hopes for revival.
The rain started beating the sugar processing company in 2012 where farmers and suppliers had not been paid for close to 10 months.
The woes of Mumias sugar have been attributed to various issues including poor leadership, mismanagement by senior company employees, embezzlement of funds and to some extent, politics.
Last year in October, former military man Julius Mwale offered Sh27.6 billion in a bid to acquire the struggling Mumias Sugar Company.
Mwale dwarfed offers by businessman Narendra Raval and the Rai family. Raval through Devki Group had offered Sh8.4 billion while the Rai family through West Kenya Sugar had offered Sh3.5 billion.
Tumaz and Tumaz enterprises, associated with Mwale offered the highest bidder for the miller. These efforts were ideally also thwarted with dirty politics intertwined into it. For instance, Sarrai Group despite having a lower bid than Tumaz and Tumaz company was allowed to take over the operations.
In the most recent development to revive the sugar company, Sarrai Group was given a green light to continue with operations at Mumias Sugar Company by a High Court in Vihiga.
This was following a case filed by the Kakamega County Government challenging the suspension of the takeover by the Ugandan firm.
In the ruling, Justice W. Musyoka certified the case as urgent further restraining Tumaz & Tumaz Enterprises Limited and receiver manager Ponangipalli Venkata Ramana Rao from interfering or terminating the lease contract between the sugar firm and Sarrai Group pending disposal of the motion or further orders by the court.
Kahawa Tungu understands that the Sarrai Group has been on the ground since December 24, 2021 undertaking different activities at the firm, including a number of meetings with management.
The company has pledged to revive the ailing miller amid protests from Tumaz & Tumaz, a firm owned by Butere-based investor Julius Mwale.
On December 30, the court blocked the receiver-manager from effecting the lease agreement with Sarrai Group until a case by Tumaz & Tumaz is determined.
Tumaz & Tumaz had protested the move by the receiver-manager to award the tender, arguing evaluations on technical capacity should have been done by a third party.
By the time Mumias Sugar Company was placed under receivership, it owed creditors at least Ksh11 billion.
Mumias owes Proparco Sh1.84 billion, Ecobank Sh1.77 billion, and the Treasury Sh2.83 billion. It owes KCB, NCBA and Stanbic Banks more than Sh3 billion.
Others who had submitted bids to lease the miller include Kruman Finances (Sh19.7 billion), Transmara Group (Sarai) (Sh11.5 billion), Pandhal Industries (Sh9.7 billion) and Kibos Sugar (Sh8.8 billion).
Sucrie Des Mascarelgnes Ltd, a Mauritius-based company, did not disclose its bid amount.
Here is a Twitter thread that shows the current state of the former Giant company:
Mumias Sugar was a global brand. It was a multi billion factory. It supported the entire economy of Western Kenya 🇰🇪 & Kenya 🇰🇪 at large. Hundreds of thousands depended on this brand. It was the place to be in terms of employment. Place to be for farmers #BrokenDreamsOfMumias pic.twitter.com/KOKbP6wBHM
— SokoAnalyst (@SokoAnalyst) February 2, 2022