By Andersen Ojwang
Even before the dust of the dusty Mbita‑Sindo‑Kiabuya‑Sori corridor settles, telling the sad reality of the dilapidated road networks in Homa Bay county, another shocker: the only publicly owned black smoke in the greater Southern Nyanza, and more specifically Migori county, the Sony Sugar Company Limited, has been placed under the auctioneer’s gong over debt.
The move by Cooperative Bank of Kenya to place the company for auction opens a can of worms over the recent government move and commitment on the publicly owned sugar factories.
In a letter to the Chief Executive Officer of the company by the bank, dated 14th July 2026, captioned “Notification of Sale of Property – South Nyanza Sugar Company Limited” , read:
“We refer to statutory demands notice dated 13th August 2025 (the 90 days’ notice). As you are fully aware, and despite the notice mentioned above, you have not rectified the default, and you owe the Bank Sh 862,328,980 as of July 2026 in respect of a facility granted to South Nyanza Sugar Company Limited.”
The Bank said the facility was used as security to secure the loan facility.
“The said facility is secured by, inter alia, a legal charge over property registered in the South Nyanza Sugar Company and a first ranking all‑asset debenture in favour of the Bank.”
The letter said the Bank intends to exercise its statutory power of sale, as aforesaid, after expiry of 40 days from the date of service of the notice upon the management, unless they pay the default and all outstanding balances owed.
“Please take note that any repayment arrangements entered into between yourselves and the Bank and/or any payments made by you after the date of this notice shall be accepted by the Bank strictly on account, and without prejudice to the Bank’s right to proceed and realise its securities as aforesaid,” read the letter.
The voice
Uriri MP Mark Nyamita said that the leaders from the region will not accept the auction of the facility.
He said the Ministry of Agriculture undertook the liabilities of the public sugar factories, including the debts and the unpaid workers’ salaries, during the privatisation.
“We are taking up this matter with the Government over their commitment. I will lead a delegation to CS Mutahi Kagwe to correct this mess. We want to see the government meets its part of the bargain, and we cannot stand to witness the sale of the only factory in the region,” he said.
What became of the Government Commitment?
Last year, ahead of the privatisation, the government wrote off over Sh117 billion in debt to bail out the local sugar industry and injected an additional Sh2.5 billion to clear arrears owed to farmers and workers.
Similarly, the government also issued a termination notice declaring all employees at the four leased sugar factories redundant.
In a memo from the Permanent Secretary, Ministry of Agriculture and Livestock Development, Dr Kipronoh Rono, dated 12th August 2025, captioned “Re‑Issuance of Termination Notices to Employees Under Redundancy” :
“In light of the ongoing restructuring of public sugar companies under the leasing framework, and in accordance with the provisions of Section 40 of the Employment Act 2007 and the respective Collective Bargaining Agreements, you are hereby directed to issue formal redundancy notices to all affected employees in your organisation,” he wrote.
The memo was written to Managing Directors: Nzoia Sugar Company, South Nyanza Sugar Company, and Chemelil Sugar Company, and Joint Receiver Manager, Muhoroni Sugar Company.
Recently, the Cabinet Secretary for Agriculture and Livestock Development, Mutahi Kagwe, said that following broad‑based consultation, four private millers were awarded a 30‑year lease for the operation of Nzoia, Chemelil, Sony Sugar Company and Muhoroni Sugar Companies.
“The procurement of the four firms followed broad‑based engagement with stakeholders across the sugar sector dating back to the year 2015 when Parliament approved the process,” he said.
In a press statement, the CS said the leasing of Nzoia Sugar Company was awarded to West Kenya Sugar Company, while that of Chemelil Sugar Company was awarded to Kibos Sugar & Allied Industries Limited.
He said the leasing of Sony Sugar Company was awarded to Busia Sugar Industry Ltd, and that the leasing of Muhoroni Sugar Company was awarded to West Valley Sugar Company.
He observed that the decision to lease out the four factories was arrived at after lengthy consultations with key stakeholders across the sugar sector, including farmers, sugar factory workers, unions, Members of Parliament, Governors, and approvals by the Cabinet.
Investment
The investors were expected to invest Sh12.29 billion towards the revival of the sugar factories.
Under the lease agreement, the following investments will be made:
West Kenya Sugar Company, which won the lease for Nzoia Sugar Company, will invest Ksh 5,764,331,333 into the factory.
Kibos Sugar & Allied Industries Ltd, which won the lease for Chemelil Sugar Company, will invest Ksh 4,500,000,000 into the factory.
West Valley Sugar Company Ltd, which won the lease for Muhoroni Sugar Company, will invest Ksh 1,023,000,000 into the factory.
Busia Sugar Industry Ltd, which won the lease for Sony Sugar Company, will invest Ksh 1,000,000,000 into the factory.
Employees
Employees at South Nyanza Sugar Company Limited (Sony Sugar) had their services terminated by 31st October 2025 due to redundancy declared by the government.
Employees at the four leased sugar factories now face termination of employment after the government moved to declare redundancies.
