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Kenyan multimillionaire tycoon Narendra Raval has expressed an interest in reviving the financially distressed sugar company Mumias Sugar through a leasing deal.
Founded in 1971, Mumias Sugar was once the largest sugar manufacturer in Kenya, producing as much as 250,000 metric tonnes of sugar per annum.
In 2012, the company ran into a financial crisis. A forensic audit by the audit firm KPMG found procedural and financial irregularities, which top management had hid from the company’s board of directors, leading to a loss of millions of dollars. While the company has been bailed out by the Kenyan government in the past, it has still struggled to remain as a going concern. On Sept. 24, 2019, Kenya Commercial Bank Group (KCB), which is owed more than $5 million by Mumias, placed the sugar company under receivership.
The Kenya-born founder of Devki Group, a leading national steel and cement manufacturer, confirmed his bid for the company in a leasing tender. It is one of eight bids that KCB Group has received thus far.
“I am among the eight individuals who have been shortlisted over the taking over of Mumias through leasing,” Raval said. “I would be very happy if I emerge the best as my main objective will be to revive the factory and give back the livelihood to over a million people who relied on the firm.”
The winning bidder will be expected to invest in getting Mumias Sugar on the path of sustainable growth after years of financial distress. It will also operate the plant on behalf of KCB Group to ensure its return on investment.
Mumias Sugar has yet to resume full operation and currently relies on ethanol production as its revenue earner. It has also moved to wind up its staff retirement fund by paying out outstanding claims to current and former employees. The company is facing a debt crisis, owing in excess of $107 million (Ksh.11.6 billion) to its creditors, including Kenya’s National Treasury, the Kenya Sugar Board and NCBA Bank Kenya.
Raval’s business and net worth
Raval is the executive chairman and majority shareholder of Devki Group, the largest cement and steel manufacturer in Kenya. Devki Group focuses on the manufacturing of building materials, including cement, aluminum and steel. The wealthy industrialist and philanthropist was estimated to have a net worth of $400 million in 2015. He was featured that year in Forbes Magazine’s list of the world’s wealthiest people.
