Three sugar millers to make own electricity

Move will help cut operational costs ahead of stiff rivalry when market opens up next year.

Butali Sugar Mills, South Nyanza Sugar Company (Sony) and Muhoroni Sugar Company have all published notices of plans to apply for electricity generation licenses from the Energy Regulatory Commission. PHOTO | ANTHONY KAMAU | NATION MEDIA GROUP 

In Summary

• Butali Sugar Mills, South Nyanza Sugar Company (Sony) and Muhoroni Sugar Company have all published notices of plans to apply for electricity generation licenses.
• Muhoroni said on April 11 it targets to generate about 3MW for use in its factory operations.
• Butali Sugar said it was seeking a permit to produce 11MW of power for its internal consumption.
• Others including Mumias, Chemelil, Kibos Sugar and Kwale International already generate their own electricity.

Three sugar firms plan to generate up to 18 megawatts (MW) of electricity to help cut on their operational costs ahead of the expected stiffer competition when the industry is fully open to external rivals next year.

Butali Sugar Mills, South Nyanza Sugar Company (Sony) and Muhoroni Sugar Company have all published notices of plans to apply for electricity generation licenses from the Energy Regulatory Commission (ERC).

“The purpose for which the licence is required is to generate four megawatts of electricity to be used in cane milling and sugar processing plant,” Ms Jane Odhiambo, the managing director of Sony Sugar said on Monday.

Muhoroni said on April 11 it targets to generate about 3MW for use in its factory operations, two weeks after another miller Butali Sugar said it was seeking a permit to produce 11MW of power for its internal consumption.

Others including Mumias, Chemelil, Kibos Sugar and Kwale International already generate their own electricity.

The internally generated electricity from bagasse, a by-product of cane, could boost the fortunes of the sugar millers who face stiffer competition when special safeguards on sugar imports from the regional trade bloc Common Market for Eastern and Southern Africa (Comesa) are lifted in early 2017.

Besides helping to cut on energy costs, excess power generated is sold to the national grid to make revenue for the millers and de-risk dependence on sugar.

Kenya was in March 2015 granted a one-year extension of sugar import limits from the regional trade bloc to revamp its ailing sugar industry.

The arrangement limiting imports expired at the end of February 2015 but Kenya requested for a two year extension saying increased imports could smother the country’s sugar business, which is not competitive and has a number of loss-making companies.

A further extension was granted to March 2017 due to the strenuous process involved in revamping the industry whose output is bogged down by high cost of production and loss-making sugar factories.