Webuye Pan Paper revival gathers steam as new investor takes over

Tarlochan Limited officer in-charge of drawing and design Mr. Mourice Odhiambo (left) takes around Bungoma County Commissioner Maalim Mohammed, Bungoma County Governor Ken Lusaka, Rai group of companies Chairman Mr. Jaswant Rai and Webuye East Mp Alfred Sambu when they toured Webuye Pan Paper during official handing over ceremony of the mill to its new investor Tarlochan Limited on May 9, 2016. [Photo:BENJAMIN SAKWA/Standard]

The impending revival of Pan Paper Mills gained momentum yesterday after the receiver manager handed its assets to the new owner.

The investor, Tarlochan Limited, a subsidiary of Rai Group of Companies, plans to pump in Sh6 billion to reopen the factory in Webuye. The company bought the factory at Sh900 million from the receiver manager and lenders.

Speaking at Webuye Guest House during the handover ceremony, Rai Group Chairman Jaswant Rai said the factory will be up and running after a four-month rehabilitation period.

They will first carry out a total overhaul of obsolete machines, including boilers.

Mr Rai said that long term lenders were owed Sh7.2 billion but the debt had been written off and the liability now lies with the Government following the collapse of the factory.

Some of the long term lenders include Kenya Commercial Bank, East Africa Development Bank, East and Southern Development Bank, Development Bank of Kenya and Noon Day Asset Management Asia PTE.

difficult decision

"It has been a difficult decision by my family to buy this machine at Sh900 million but it is worth it. Once revived, it will serve the locals of Bungoma County and it will turn out to be one economic giant," said Rai.

The investor said that they will process paper and nothing else once the factory is up.

"We have seen political interference but that one won't stop us because we want to see Bungoma become an industrial hub. Apart from acquiring Pan Paper, we also own Raiply Timber Company, West Kenya Sugar Company and Menengai Oil Refinery Company," he said.

He disclosed that he will give priority to former employees and also employ locals to work in various areas so as to empower them economically.

Apart from inheriting a workforce of over 130 former employees, the company will also own the land, buildings and equipment.

Bungoma Governor Kenneth Lusaka said the handover ceremony marks a milestone in the revival of the mill which collapsed seven years ago and dealt a big blow to Webuye economically.

"The revival bid of this factory is an achievement of the Jubilee government and their campaign pledge has been fulfilled. Local politicians who are against this revival are riding on a political obituary, locals are happy that the factory is about to roar back to life," he said.

He called on the locals to support the initiative because the project will serve them and it will change the economy of the region.

Mr Lusaka called on the investor to give priority to former employees and the locals.

Bungoma County Commissioner Mohamed Maalim also lauded the national government for reviving the factory, and said that the move is a proof that the Government cares for its people.

"We will offer enough security to the miller so that it (the mill) is revived on time. We will not tolerate political interference in the revival of this important project," said Maalim.

Joseph Mutuku, director of industries in the Ministry of Industrialisation, said they are happy to see Pan Paper getting back to its feet again.

"We have been fighting to reinstate Pan Paper and we are happy to see the assets being handed over to the investor by the receiver manager. This is the best achievement we have ever made," said Mutuku.

Present also at the function were Webuye East MP Alfred Sambu and senior national and county government officials.