A Kisumu businessman and owner of Foam
Mattresses Limited is set to put up a Sh940 million sugar factory in
Siaya County at a time when the industry is battling a myriad of
problems including low production.
Surendra Patel, in
partnership with an unnamed local investor, is setting up South Gem
Sugar Factory Limited in Kanyilaji village with a capacity to crush
1,000 metric tonnes of cane per day producing 2.5 metric tonnes of
sugar.
Mr Patel is the proprietor of Foam Mattress Limited which has production plants in Kisumu and Nairobi.
The
businessman, who also owns Tuff Foam Mall in the lakeside city, is also
involved in the manufacture of PVC pipes, tanks and barbed wire, chain
link and other steel products.
“We have purchased some
40 acres of land where we intend to set up the factory. Once we get the
prerequisite regulatory approvals, we shall source the equipment from
India,” Mr Patel said in an interview.
“We expect that
construction of this plant will take about 18 months after
groundbreaking. My share of the capital for this investment is coming
from my businesses while the other half is from my co-investor.”
The
proposed factory will require about 8,000 hectares of land under
sugarcane cultivation, from which the expected average yield per hectare
will be 60 tonnes, regulatory filings submitted by Mr Patel show.
The project is expected to create 300 jobs.
The
businessman’s foray into the sugar industry comes at a time when the
industry is suffering from low cane production, high costs and stiff
competition from cheap sugar imports. The shortage of raw material has
hit struggling State sugar millers particularly hard, but the nimbler,
better managed private firms have continued to thrive.
“Presently
there is no sugar factory in the nearby area and hence no problem is
fore seen in getting the adequate quantity of sugar cane once it is
developed,” said Mr Patel.
Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 800,000 tonnes.
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