Investor Taps Firm Linked To Dangote In Mumias Revival

News World

Businessman Julius Mwale who placed Sh27 billion bid in leasing of ailing Mumias Sugar has tapped an Indian firm running Dangote Sugar refineries in Nigeria to manage the Kenyan miller.

Mr Mwale through his Tumaz and Tumaz Enterprise says it has inked a deal with J P Mukherji & Associates (JPMA) to help revive Mumias sugar, which closed shop in 2018.

The Indian firm is the technical partner of Tumaz and Tumaz Enterprise over the 20-year lease period with the brief of returning Mumias Sugar to profitability, says bid documents seen by the Business Daily.

JPMA consultancy has since 2019 been managing Dangote Sugar Refineries, owned by Africa’s richest man Aliko Dangote, and produces 1.44 million tonnes of sugar annually.

The Mwale City investor topped the bids in its offer to run the troubled miller for 20 years with a Sh27 billion offer, trouncing steel billionaire Narendra Raval, whom through his Devki Group offered Sh8.4 billion while Rai under his West Kenya Sugar placed Sh3.5 billion.

Mr Mwale commits to spend Sh5.5 billion to upgrade the rundown production plant.

“T&T has demonstrated track record for building new enterprises with big positive impacts for the local community,” said Mr Mwale in a statement.

He said JPMA consultancy would help replicate the success of Dangote’s Sugar division in Kenya and return Mumias Sugar to profitability.

Dangote’s Sugar division reported Sh35 billion sales in the first six months of 2021, representing a 27 percent increase.

Mumias Sugar reported Sh800 million sales in the six months in 2018 before it was placed under receivership for unpaid debts.

The entrepreneur has received a commitment of a $200 million (Sh22.1 billion) loan from a top American bank to boost his chances of winning the lease.

Mumias was in September 2019 placed under receivership by KCB Group to protect its assets and maintain its operations.

The lender has been barred from auctioning the plant to secure assets used as security for other loans, prompting it to turn to the lease option.

Mumias owes Proparco Sh1.84 billion secured using the electricity generation plant, Ecobank Sh1.77 billion on the ethanol plant, and the Treasury Sh2.83 billion. Banks it owes more than Sh3 billion include KCB, NCBA and Stanbic Bank.

JPMA has been a consultant and manager of a number sugar factories in Saudi Arabia, India, Ethiopia, Uganda, Tanzania and Nigeria. It also consulted in the establishment of Kwale Sugar company in 2014.

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