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Sudan Tribune

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Sudanese sugar Co places top bid for collapsed Kenya sugar Co

November 8, 2007 (NAIROBI) — A Sudanese sugar company has placed the highest bid for reviving a collapsed Kenyan sugar company, an industry official said Thursday.

The official said preliminary results of the evaluation process indicated that Country Logistics Limited, a consortium led by Kenana Sugar Company of Sudan, placed the highest bid of KES2.3 billion ($34.5 million) for reviving Miwani Sugar Company, which collapsed in 2001.

The reserve price was KES2 billion.

“The bids were opened at the Kenya Sugar Board premises and final agreements will be signed at a later date,” the official said.

“The factories may start operations under new management by March 2008,” the official said.

Miwani, which collapsed under the weight of high operational costs and frequent farmers’ boycotts over nonpayment for sugar cane deliveries, has estates covering 3,200 hectares. However, only 690 hectares of this are presently being utilized.

Kenana is the largest white sugar cane producer and processor in the region, operating about 100,000 acres of sugar estates in Sudan.

The official said there were also bids from investors for the Muhoroni Sugar Factory, which has itself been under receivership since 2001.

The auctioning of the two factories comes two months after the Common Market for Eastern and Southern Africa or COMESA gave Kenya a four year-extension of a sugar industry safeguard period from February next year.

The safeguard is designed to help Kenya prepare for stiff competition from other sugar producers in the region. The nation had been granted four-year preferential treatment period by the COMESA in 2002 to streamline the industry.

The extension was granted in September this year after visiting COMESA officials found that recent reforms in the sector had not succeeded in making the local industry competitive against other producers in the region.

Kenya’s sugar industry is yet to recover fully from a problems including bad weather conditions, poor transport infrastructure and high production costs as well as mismanagement in the industry resulting in frequent strikes. Officials had earlier predicted sugar output this year to rise to 549,000 metric tons from 488,000 tons the previous year.

(Dow Jones)

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