Businesses & Financial News

Farmers eye Sh 2 billion windfall in Mumias Sugar’s bidding exercise

Farmers and residents in Kakamega County are eying a sumptuous early Christmas gift after Mumias Sugar Company’s Receiver Manager PV R Rao announced the list of bidders who had submitted bids to lease the factory currently under receivership.

A total of 8 bidders submitted the bids according to the receiver manager, with the top bid of Kshs. 27.6 billion for a 20 year lease from Tumaz and Tumaz Enterprises limited, a company associated with Mwale City investor , Julius Mwale.

Sources familiar with the bidding process have revealed that Mwale’s company bid to the receiver manager PV R Rao was accompanied by a Kshs. 22 billion (US $200 million) cash injection from a United States based commercial lender, made available to Mwale’s bid on August 30th, 2021.

Mr. Mwale confirmed that he already secured the total bid money and will have the factory up and running within 6 months, if his company emerged victorious in the ongoing bidding process.

In Mwale’s company bid details seen by sources familiar with the bidding process, Ksh. 2 billion is earmarked for farmers for cane development , and Ksh. 5 billion will go towards initial debt repayment, restoration and upgrade of the cane factory.

The bid also shows Ksh. 2 billion going towards the upgrade of the ethanol production plant. The ethanol plant upgrade is to enable it produce pharmaceutical products and vaccines in addition to ethanol production.

Another Ksh. 2 billion is allocated for a modern hospital at the factory which will serve the community.
The power generation systems and water bottling plant will get Ksh. 1 billion for upgrades.

The bid documents further reveal a total of Ksh. 8 billion will be invested in New housing, Sugar themed tourist resort, an airport and agricultural research university.

The Receiver manager PV R Rao said the bids will undergo technical and financial evaluation before announcing the winning bid.
Other bidders who submitted their bids are, Kruman Finances associated with French and Turkish investors, with a bid of Kshs. 19.6 billion for a 25 year lease and Transmara Group (Sarai) with a bid of Kshs. 11.5 billion over a 20 year lease period.

Others are Pandhal Industries with Kshs. 9.7 billion over 20 years lease. Kibos Sugar bid came in at Kshs. 8.8 billion.

Devki at Kshs. 8.4 billion over 20-years lease and West Kenya Sugar was Kshs. 3.5 billion.
A Mauritius based company Sucrie Des Mascarelgnes Ltd also participated but did not disclose the value of its bid.

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