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Chemelil to generate 3MW of power to cut costs

NEWS
By Hezron Ochiel | January 8th 2015
Cabinet Secretary Felix Koskei (left) with Chemelil Sugar managing director Charles Owelle at the miller’s stand during the Kisumu’s Regional ASK Show in August. [PHOTO: TITUS MUNALA/STANDARD]

Chemelil Sugar Company is set to generate its own electricity after successfully installing new turbines at a cost of Sh105 million.

The new equipment will see the company generate 3 megawatts (MW) of electricity to run the factory. This will save the sugar miller Sh12 million monthly in power bills. The firm has been purchasing 1.5 MW from Kenya Power with the breakdown of its 40 year-old turbine.

The installation is part of the sugar firms’ bid to comply with Common Market for Eastern and Southern Africa (Comesa) moratorium aimed at enhancing competitiveness of millers in the regional market.

Speaking on Tuesday while inspecting the facility, Agriculture Cabinet Secretary Felix Koskei lauded the company for undertaking the crucial cost-saving investment, saying it will help lower cost of production.

Comesa safeguards

“The government is satisfied with the on-going installation exercise,’’ he said, adding that resumption of normal operations in the company will partly help solve challenges bedeviling the sugar sector.

The company’s Managing Director Charles Owelle said the firm will reinvest the funds into factory maintenance.

“This will greatly enhance our competitiveness in the Comesa region. The project is part of wider efforts to turn the sugar companies profitable ahead of the lapse of Comesa sugar safeguards,” Owelle said.

The House Committee on Finance, Planning and Trade approved the sale of 51 per cent stake in five struggling sugar companies to strategic investors prior to the lapse of Comesa sugar safeguards in February 2015.

The process is expected to see rehabilitation and expansion of Miwani, Muhoroni, Nzoia, Sony and Chemelil companies to enhance their competitiveness.

Farmers have been reserved 30 per cent stake while the rest will be sold to strategic investors. The sugar sector generates an estimated Sh12 billion annually, provides about 500,000 jobs and supports livelihood of about six million people.

Currently, total sugar production stands at about 450,000 metric tonnes. The total demand for sugar in the country is 610,000 tonnes. The deficit is however, filled by importation from Comesa countries.

 

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