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Rai’s West Kenya Sugar Factory signs Sh600 Million Deal with RentCo Africa

Dokta Wanz by Dokta Wanz
September 22, 2020
in Business
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KenGen books Sh440 Million

Rai Group’s owned sugar milling firm West Kenya has inked a Sh600 Million deal with an asset leasing firm RentCo Africa.

Rai Group’s West Kenya Sugar Company, which was at the center of the mercury sugar scandal, said it was looking to boost cane production.

The deal will help the Rai firm do away with the burden of buying and maintaining the equipment, freeing capex that will be diverted towards increasing cane production.

“The transaction was to a tune of 600 million for the financial year 2019-2020. The equipment delivered includes semi-prime movers, tractors cane loaders and trucks. This was in partnership with Absa Bank Kenya who stepped in as financing partners and various equipment dealers.” RentCo Africa chief executive Robert Nyasimi told the Business Daily.

Leasing to agricultural sectors is becoming the new norm in the wake of Covid- 19.

A Sugar Directorate report in June shows three brands owned by the Rai family controlled 45 per cent of the total sales in the six months to June.

This has grown from the 41 percent market share they held in the corresponding period last year.

West Kenya had the industry leading share of 29 per cent, while Sukari Industries accounted for 11 percent with Olepito at two percent of the total of 292,040-tonne sales reported between January and June.

Last year,  a local viral whistleblower blog, published an article on how Jaswat Rai, the owner of West Kenya Sugar mills has been mistreating and enslaving Kenyans.  

The Rai family is believed to have had close ties with the ruling elite of the Moi, Kibaki and Kenyatta administrations.

According to their market dominance, they have interests in cement production (Rai Cement), edible oils and soaps (Menengai Oil Refineries), sawmilling (Timsales), wheat farming, horticulture and real estate (Tulip Properties).

According to a story published in a local daily, West Kenya Sugar Company imported a total of 34 million kilogrammes of sugar last year but, overall, Raiply-associated businesses still owned by the Rai family – imported 187 million kilogrammes by taking advantage of the duty-free window opened by the government last year.

Rai
The Entrance into Bookers Academy and Mumias Sugar milling company

West Sugar has in the past locked horns with most of the local sugar producers for sugarcane poaching sugarcane. For lack of a financial muscle to tussle the giant, most of them have died, like Mumias and Nzoia.

 

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