Kinyara Sugar Factory owned by the Sarrai Group is stuck with white industrial sugar estimated at Ksh668 billion in Uganda as Kenya shuns the expensive commodity for cheaper alternatives in the world market.
Kinyara, which is owned by Sarbjit Singh Rai, is unable to sell five million tonnes of sugar that the firm has processed as the neighbouring countries opt to import the sweetener from other markets at a lower cost.
White refined sugar from Kinyara is selling at Sh133,000 a tonne, way expensive when compared with the Sh77,000 that Kenyan traders and manufacturers are paying for the same quantity from Saudi Arabia, according to the sector regulator.
Of the total 8,642 tonnes of refined sugar that were imported to Kenya in June, only a paltry 60 tonnes came from Uganda.
“In June, white refined sugar supplied by Saudi Arabia was 2,890 tonnes, India (2,292 tonnes), Mauritius (1,987 tonnes), Egypt 1,413 tonnes, and Uganda 60 tonnes,” said the Sugar Directorate.
“Saudi Arabia was the cheapest source of white refined sugar, with a mean CIF value of Sh77,798 per tonne,” added the directorate.
Kinyara Industrial White Sugar Refinery started production last year as the firm stepped in to fill the gap in the regional market, which relies on imports from Egypt and other world countries for the supply of this commodity.
Currently, Egypt and Mauritius are the only other countries in Africa that process this type of sweetener.
Kenya has an annual requirement of 150,000 tonnes a year of white refined sugar, which would have formed a good market destination for the Ugandan-based firm which produces up to 270 tonnes of the commodity a day.
White refined sugar also referred to as Industrial sugar, is mainly used by manufacturers in the sweetening of confectioneries and other goods that requires refined sugar.
Kisumu-based Kibos Sugar Company had planned to start an industrial sugar plant almost five years ago but the firm is yet to start processing this commodity, forcing Kenya to rely fully on imports.