Jaswant Rai to invest $43.3 million in recently acquired Nzoia Sugar

Key Points

• Jaswant Rai will inject $43.3 million to modernize Nzoia Sugar and roll out a large-scale cane development plan under a 30-year government lease.
• The government leased four sugar mills to private firms after spending over Ksh117 billion in bailouts, aiming to restore profitability through private capital.
• West Kenya Sugar pledges transparency, legal compliance, and community engagement while enhancing worker welfare and stabilizing raw material supply to boost output.

Kenyan businessman and sugar tycoon Jaswant Rai is set to invest $43.3 million to revive and expand the struggling state-owned Nzoia Sugar Company, after winning a 30-year lease from the government. The deal marks a significant move in the government’s push to turn around the country’s ailing sugar industry by bringing in private investors through competitive leasing.

Rai’s West Kenya to revive Nzoia

According to a statement issued by the Ministry of Agriculture and Livestock on May 10, the Rai-led West Kenya Sugar plans to rehabilitate and modernize the Nzoia factory with the investment of Ksh5.6 billion ($43.3 million) while undertaking an extensive cane development program in the region. Kenya has leased four state-owned sugar mills to private operators for 30 years in a bid to revive the struggling industry. 

The move, confirmed by Agriculture Cabinet Secretary Mutahi Kagwe, follows years of bailouts totaling over Ksh117 billion ($905 million). Nzoia Sugar was handed to West Kenya Sugar, with other allocations including Chemelil to Kibos, Sony to Busia Sugar, and Muhoroni to West Valley. West Kenya Chairman Jaswant Rai pledged transparency, compliance, and community partnership, promising improved worker welfare and legal adherence. 

Board Chairman Alfred Khang’ati voiced hope that private management would end years of inefficiency and debt. The new lease model is expected to stabilize raw material supply, boost factory output, and enhance farmer morale through timely payments. The government has already disbursed over Ksh2.3 billion ($17.78 million) to farmers and factory workers ahead of the transition, saying public-private partnerships will inject much-needed capital and restore the sector’s productivity and profitability.

Rai expands sugar empire, eyes avocados

Jaswant Rai is one of Kenya’s wealthiest businessmen, controlling Rai Group, a leading player in the sugar industry through subsidiaries like West Kenya Sugar and Sukari Industries. The group also owns Kinyara Sugar Works, Uganda’s second-largest miller. 

Beyond sugar, Rai has been expanding into new sectors. In 2023, he led the group into avocado farming through Menengai Orchards in Nakuru County, tapping into the lucrative Chinese market and strengthening his hold in Kenya’s growing fresh produce sector.

Rai’s investment comes amid growing calls for sustainable reforms in Kenya’s sugar industry, a sector that has for decades faced structural inefficiencies, poor governance, and mounting debts. With the entry of well-capitalized private millers like West Kenya Sugar, the government hopes to reposition the industry as a productive and competitive segment within the national economy.