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Investor to use Sh6b to revive collapsed Pan Paper Mills

After seven years of closure, machines at the Webuye-based Pan Paper Mills have roared back to life.

The firm’s revival is being undertaken by Tarlochan Ltd, an Indian-owned subsidiary of the Rai Group of Companies, which plans to pump in Sh6 billion. The company bought the miller at Sh900 million from the receiver manager and lenders.

During the official handing-over ceremony held in Webuye, Rai Group Chairman Jaswant Rai said the factory will be up and running after a four-month rehabilitation period.

The investor said total overhaul of the obsolete machines, including boilers, will be done.

“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 residents of Bungoma County and it will turn out to be one economic giant,” said Mr Rai.

He said the company will only process paper. “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 they would give priority to former employees and also employ locals to work in various areas so as to economically empower them.

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

Bungoma Governor Kenneth Lusaka said revival of the factory will mark a major milestone on the economic growth of the county.

“The revival of this factory is an achievement to our people. Locals will be employed and businesses will prosper,” said Lusaka.

He asked locals to support the initiative because the project will serve them and boost the economy of the region.

In 2009, many people in the once-lively town were left crestfallen when the factory collapsed due to a huge debt.

The closure of the factory signaled an economic disaster for thousands of employees and residents of Webuye Township.

From empty shop shelves to deserted rental homes, the impact of the shutdown was devastating.

Justin Simiyu, a trader in Webuye town, said the move to revive the factory comes as a relief to the business community in the ‘ghost’ town.

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