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By MUGAMBI MUTEGI
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.