Jaswant Rai wins 30-year lease to operate troubled Kenyan sugar factory

Key Points

• Jaswant Rai secures 30-year lease to manage Nzoia Sugar, supporting Kenya’s broader push to privatize and revive the struggling sugar sector.
• Rai’s team commits to clearing over Ksh200 million ($1.55 million) owed to farmers and retaining all employees for at least one year.
• The lease strengthens Rai’s agricultural empire, despite legal challenges, placing him at the forefront of Kenya’s sugar industry reforms.

Kenyan businessman Jaswant Rai has secured a 30-year lease to run the troubled state-owned Nzoia Sugar Factory, marking a major step in the government’s push to revive the struggling sugar sector through privatization.

Nzoia’s new owners pledge debt clearance

Under the terms of the deal, the new management has committed to clearing over Ksh200 million ($1.55 million) in debts owed to sugarcane farmers before the end of the fiscal year. All current employees will also be retained for at least one year to ensure a smooth transition.

Speaking about the development, Nzoia Sugar’s board chairman, Alfred Khang’ati, said Rai would officially take over operations at the Bungoma-based mill within the next week. Khang’ati emphasized that the move is aimed at breathing new life into the factory and restoring hope for farmers and workers who have gone unpaid since 2022.

“More than Ksh200 million ($1.55 million) will be paid to farmers before this financial year ends,” he said. “And employees will stay on under the new management for at least a year to make sure the handover goes smoothly.”

Jaswant Rai deepens agriculture investments in Kenya

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.

The bold step into Kenya’s sugar reform

Winning the Nzoia Sugar lease now adds another important piece to Rai’s growing business empire. It also places him at the center of efforts to reform Kenya’s ailing sugar industry, which has long battled inefficiencies, heavy debts, and farmer discontent.

However, the lease has not been without controversy. Some politicians and stakeholders have already raised concerns about the transparency of the leasing process, and legal challenges have emerged. Still, supporters of the deal argue that with the right leadership, Nzoia Sugar could serve as a model for turning around other struggling state-owned enterprises.