Govt orders state sugar firms to issue redundancy notices

The government, through the Ministry of Agriculture, has directed the management of key state-owned sugar companies to issue redundancy notices to employees.

This follows the completion of their leasing to private investors under the public sugar sector restructuring programme.

The letter is addressed to the managing directors of Nzoia Sugar Company, South Nyanza Sugar Company, Chemelil Sugar Company, and the joint receiver manager of Muhoroni Sugar Company.

The firms were instructed to formally notify all affected employees of their termination in compliance with Section 40 of the Employment Act, 2007, and respective Collective Bargaining Agreements (CBAs).

The notices, according to the directive, must clearly state the reason for termination, outline each worker's redundancy entitlements under the law and the applicable CBA, and be copied to the respective County Labour Officer.

Management is also instructed to assure employees that all dues and lawful entitlements will be fully paid in accordance with statutory provisions.

The leasing process, first announced in 2020 to revive the struggling sugar sector, has now been finalized.

Nzoia Sugar Company has been leased to West Kenya Sugar Company, Chemelil Sugar Company to Kibos Sugar & Allied Industries Limited, Sony Sugar Company to Busia Sugar Industry Ltd, Muhoroni Sugar Company to West Valley Sugar Company, and Miwani Sugar Company to Pandhal Industries.

The government says the private investors are expected to inject fresh capital, modernize operations, and settle outstanding liabilities in a bid to restore the competitiveness of the sector.

However, the restructuring has also triggered concerns over job losses and the fate of thousands of workers who depend on the industry.

The sugar sector remains a critical employer and economic lifeline in Western Kenya, but chronic inefficiencies, outdated machinery, and high production costs have eroded its viability.

Authorities insist that the leasing is the most viable route to returning the millers to profitability and safeguarding the livelihoods of sugarcane farmers.