Kibos set to pioneer industrial sugar milling

Posted on : Monday , 19th October 2015

Kenya is set to start producing its first batch of industrial sugar when a Kisumu-based miller opens a special unit to handle the commodity next month.

Kibos Sugar factory will become the first sugar miller in eastern and southern Africa to manufacture the refined sugar meant for industrial use.

Users of the commodity are normally forced to import from Brazil under special licences that come with tax concessions. Industrial sugar is an essential input for production of various products, mainly by larger manufacturers.

Mr Rajju Singh, a manager at Kibos, told the Business Daily that production will begin soon as the company expands its products beyond table sugar.

“We have put everything in place and production of the industrial sugar is set to start next month,” said Mr Singh.

Mr Singh said the factory would be manufacturing 350 metric tonnes of the refined sugar daily with production expected to grow in future as they focus on the regional market.

The miller is banking on diversification of its products to remain relevant in the business ahead of full liberalisation of the market next year that will see regional countries shipping in duty free sugar into Kenya without administrative restrictions.

Currently, Kenya enjoys an import quota from the Common Market for Eastern and Southern Africa (Comesa), which restricts the amount of sugar that can be brought in the country.

The move to manufacture industrial sugar is likely to reduce the amount of imported refined sugar that unscrupulous traders divert into the local market re-packaged as table sugar, hurting the millers.

Last year, the government said it would tighten oversight over importers of industrial sugar to stop the dumping.

“We have noted with serious concerns that a number of industrial sugar importers duly licensed to import sugar within the duty remission scheme are allowing such sugar to be re-packaged and retailed on the market in competition with direct consumption sugar,” said Agriculture PS Sicily Kariuki.

Last month, East African ministers licenced 17 more Kenyan firms to import 117,500 tonnes of industrial sugar under preferential terms over the next one year amid rising demand for beverages and confectionery.

The region’s Council of Ministers chairperson Harrison Mwakyembe said the firms would import the sugar at preferential duty rate of 10 per cent under the East Africa Community duty remission scheme.

Four other Kenyan firms were in April granted permission to import 30,500 tonnes of industrial sugar under preferential terms over a one year period.

Nairobi Bottlers and Kenya Breweries that have been allowed to ship in 29,000, 26,000 and 20,000 metric tonnes of industrial sugar respectively also emerged as beneficiaries of the sweetener.

Kenya remains a sugar deficit country and relies on imports to bridge a shortfall of 300,000 metric tonnes annually.