The Kenya Sugar Board on Tuesday, May 13, 2025 defended the leasing of government owned factories to private investors for a period of 30 years.

The four factories include Nzoia, Chemilil, Sony and Muhoroni Sugar Companies.

Kenya Sugar Board Chief Executive Officer (CEO) Jude Chesire stated that the leasing process has been designed to favour sugarcane farmers.

“If they don’t deliver, we’ll hand it over to those who truly prioritise our farmers. For every kilo of sugar processed, the lease and concession fees from the four investors will flow back to the farmers,” he said.

Further, he stated that the government will revoke the investor’s lease should they fail to modernise mills, support sugarcane development or pay farmers as agreed.

“Farmers come first. If investors leasing sugar factories fail to modernise mills, support cane development, or pay farmers weekly as agreed, the government will revoke their leases simple. A 30-year term is only justified by the heavy capital injection expected,” he added.

The lease

In a statement on X on May 9, 2025, the Cabinet Secretary for Agriculture and Livestock Development, Mutahi Kagwe, said that following a broad-based consultation, four private millers have been awarded a 30-year lease for the operation of the four sugar factories.

“The procurement of the four firms followed broad-based engagement with stakeholders across the sugar sector dating back to the year 2015 when Parliament approved the process,” he said.

He said the leasing of Nzoia Sugar Company has been awarded to West Kenya Sugar Company, while that of Chemilil Sugar Company has been awarded to Kibos Sugar &Allied Industries Limited.

Further, the leasing of Sony Sugar Company has been awarded to Busia Sugar Industry Ltd and the leasing of Muhoroni Sugar Company has been awarded to West Valley Sugar Company.

“The four firms were competitively procured by the government through the Ministry of Agriculture and Livestock Development, the Kenya Sugar Board, and other key government players,” he said.

He observed that the decision to lease out the four factories was arrived at after lengthy consultations with key stakeholders across the sugar sector including farmers, sugar factory workers, unions, Members of Parliament, Governors and approvals by the Cabinet.

Additionally, the Health CS said the decision was informed by the need to ensure a return on investment for taxpayers, who have, over the years, bailed out the ailing sugar sector.

“Last year, the government wrote off over Ksh117 billion to bail out the local sugar industry and injected an additional Ksh2.5 billion to clear arrears owed to farmers and workers,” he said.

He observed that due process was followed in the lead up to the selection of leasing as a viable model for the transformation and rehabilitation of the four sugar factories, as earlier guided by Parliament and the Cabinet.