Dangote linked firm considered for Mumias sugar revival deal

Sugar and allied industries consultancy firm, JPMA (J P Mukherji & Associates) which runs Nigeria’s Dangote Sugar refinery Plc. is being considered to take over operations at Mumias Sugar Company.

Tumaz and Tumaz Enterprises, top bidder at the public bidding for the debt-ridden Kenyan miller, yesterday said it had hired the Indian company in a move insiders say is likely to favour the Dangote-linked firm due to its long history in the sugar industry.

Tumaz and Tumaz Enterprises – a brand associated with tycoon Julius Mwale — had last month placed the highest bid Sh27.6 Billion for the leasing of Mumias Sugar Company, beating billionaire Rai family and steel mogul Narendra Raval.

Raval, through his Devki Group, offered Sh8.4 billion while Rai under his West Kenya Sugar offered Sh3.5 billion in a tedious process the miller’s Receiver Manager P.V. Rao now awaits technical and financial evaluation before a winning bid is publicly declared.

Devki Group founder Narendra Raval famously withdrew his lease bid in May this year saying the bidding exercise had been obstructed by politicians. The matter would later end up at the Senate’s Agriculture Committee which directed the receiver-manager Pongangipalli Rao to re-advertise the bids within 14 days.

Tumaz and Tumaz Enterprises topped the bids in its offer to run the troubled miller for 20 years that if successful could see the miller return to full operations.

Other bidders who submitted their bids are Kruman Finances associated with French and Turkish investors, with a bid of Sh19.6 billion for a 25-year lease, and Transmara Group (Sarai) with a bid of Sh11.5 billion over a 20 year lease period.

Pandhal Industries bid in a Sh9.7 billion proposal over a 20 years lease while Kibos Sugar bid came in at Sh8.8 billion.

A Mauritius based company, Sucrie Des Mascarelgnes Ltd also participated in the October public bidding exercise but failed to disclose the value of its bid.

The hiring of Indian-company JPMA has been a consultant and manager for a number of sugar factories across the world including Saudi Arabia, India, Ethiopia, Uganda, Tanzania, and Nigeria. Mwale said he will offer the farmers Sh2.2 billion through Mumias Outgrowers Company (MOCO) as an incentive to resume sugarcane growing.

The firm was in 2014 consulted for the establishment of Kwale Sugar Company and is presently ranked one of the largest sugar projects responsible for upgrading Dangote’s factories to crush 24,000 tonnes of cane per day from 6,000 tonnes per day.

Dangote’s Sugar division, an affiliate of Dangote group and the largest supplier of sugar in Africa reported a Sh35 billion turnover for the first 6 months of 2021, an increase of 27 percent from the amount reported in 2020.

Mumias Sugar reported revenues of Sh3.5 billion for 6 months in 2015, which decreased to Sh800 million for 6 months in 2018 before entering receivership.

The High Court had last month sanctioned the opening of tenders for leasing the mill after about a three-year closure. The process had been dogged by controversies that delayed the drive to revive the company that went down under heavy debts and inadequate supply of raw materials in 2018.