Three major sugar millers have defended the continued importation of raw and industrial sugar under Kenya's duty remission programme, telling Parliament that the country's manufacturers cannot rely on locally produced sugar because Kenya still lacks the capacity to refine industrial-grade sugar.
Appearing before the National Assembly Committee on Trade, Industry and Cooperatives, Kibos Sugar and Allied Industries Ltd, Busia Sugar Industry Limited and South Nyanza Sugar Company (Sony Sugar) argued that legitimate imports support the manufacturing sector while illegal sugar smuggled into the country poses the greatest threat to local millers and cane farmers.
The committee, chaired by Ikolomani MP Bernard Shinali, is conducting an inquiry into the impact of sugar imports on local manufacturers, cane farmers, jobs and the future of Kenya's sugar industry. The probe follows concerns over the importation of 27,000 metric tonnes of raw sugar by Mombasa Sugar Refinery Limited.
Kibos Sugar Managing Director and Chief Executive Officer Bhire Chatthe told lawmakers that industrial demand for refined sugar is far higher than what local factories can produce, making controlled imports necessary to keep key industries running.
"The volumes of raw sugar that has to be imported will be based on the demand for refined sugar in the country. According to the Kenya Sugar Board Year Book records, demand for white refined sugar for industrial use in Kenya, tops 200,000 metric tons," Chatthe said.
He explained that food processors, beverage manufacturers, pharmaceutical companies and other industries require highly refined sugar that is different from the ordinary mill white sugar produced by local factories.
According to Chatthe, Kenya does not currently have enough refining capacity to meet both the quality and quantity required by industrial users. He said restricting imports before local capacity improves would disrupt manufacturing and affect businesses that depend on refined sugar as a raw material.
Chatthe also rejected claims that imported raw sugar is responsible for the struggles facing local millers.
"We wish to reiterate that factory production volumes do not depend on imports of sugar alone," he said.
Instead, he pointed to inadequate sugarcane supply, inefficient milling operations and other long-standing structural challenges as the main factors limiting local sugar production.
Sony Sugar echoed the same position, saying manufacturers have little choice but to rely on imported industrial sugar because local factories do not produce refined sugar suitable for industrial use.
Managing Director Pamela Jane Odhiambo told the committee that the duty remission programme remains necessary to bridge the gap between local production and industrial demand.
"Yes, it is appropriate because local millers do not process refined sugar to cater for industries that rely on industrial sugar as their raw material," Odhiambo said.
Busia Sugar also supported the continued importation of industrial sugar but shifted attention to the growing problem of sugar smuggling, which it described as a bigger threat to the local industry than legally imported sugar.
The company told MPs that large volumes of uncustomed sugar continue to enter Kenya through porous border points, hurting sales of locally produced sugar and weakening factory operations.
"Entry of uncustomed sugar through the Busia, Malakisi, Malaba, Isbania porous borders have accessed our market and led to reduced offtake of locally produced sugar," Odhiambo said.
The company said the decline in demand has forced it to reduce factory operations and cut workforce deployment.
"Manpower shift reduced from previous 4 shifts to 2 shifts for every work station," she added.
Busia Sugar urged Parliament and government agencies to strengthen border surveillance and enforcement to curb illegal sugar imports, arguing that eliminating smuggling would do more to support local millers than restricting legitimate industrial sugar imports.
The three millers also asked lawmakers to distinguish between raw sugar imported for refining into industrial-grade sugar and sugar imported for direct household consumption, saying the two serve different markets and should not be treated the same.
They further called for policy reforms that protect local cane farmers and millers while ensuring manufacturers have a reliable supply of industrial sugar.
The parliamentary inquiry is expected to hear additional submissions from millers, refiners, farmers, regulators and other stakeholders before making recommendations that could shape Kenya's future sugar import policy and the broader direction of the country's sugar industry.