Kenya: American firm to invest in sugar milling and 5,000-acre cane farm
The Nation | 15 June 2015
A harvester at the Dominion farms (Photo: The Nation)
American firm to invest in sugar milling and 5,000-acre cane farm
By GEORGE NGIGI, [email protected]
American Dominion Farms plans to set up a sugar factory in Siaya to be supported by a 5,000-acre sugarcane plantation.
The company intends to convert part of its 17,000-acre land at Yala Swamp to establish the plantation and develop a mill.
“DFL has set aside over 5,000 acres of the reclaimed area of land at Ulungo…for establishing the plantation” said a report filed with the National Environment Management Authority (Nema).
The company did not disclose the amount of money it intends to use in implementing the project. Attempts to contact the managing director were not successful.
Dominion also plans to buy sugarcane from residents who may choose to start own plantations.
Dominion entered a 25-year lease with the community around the Yala Swamp for the conversion of the swamp for agricultural activity in return for job opportunities.
“The sugar will be sold cheaply to the workers and residents thus saving the consumers and retailers the huge costs incurred in purchasing sugar from other areas,” said Dominion in the report.
Dominion currently produces Dominion Prime Harvest Rice and Tilapia fish following conversion of over 2,000 acres of land.
It is owned by American Calvin Burgess who is also the chief executive. Its entry into the sugar sector comes at a time the government has increased the tax burden on imports in a bid to protect the struggling sector.
In his budget statement last week, Treasury secretary Henry Rotich increased duty on imported sugar by 130 per cent to Sh44.75 per kilogramme from Sh19.40.
READ: Foreign sugar cost increased to protect Kenya millers
Kenya is allowed to import up to 300,000 tonnes from members of the Comesa trading bloc to bridge a deficit arising from an annual demand of 700,000 tonnes.
Mr Rotich said the duty increase will cushion the sugar sector from unfair competition, enable local factories to break even and pay farmers promptly.
Government-owned millers have been struggling with huge debt burdens even as their privately-owned peers such as West Sugar and Butali posted good results.
Listed miller, Mumias Sugar Company, recently received Sh1 billion from the State to keep it afloat before it raises an additional Sh4 billion from other shareholders to help it clear debts. The government owns 20 per cent of Mumias.
The Treasury is also in the process of privatising Nzoia Sugar in Bungoma, South Nyanza Sugar in Migori, Chemelil, Muhoroni, and Miwani Sugar in Kisumu.
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