West Valley Sugar Company has urged Parliament to introduce tighter controls on sugar imports, saying the continued inflow of imported sugar is driving down local prices, squeezing factory revenues and threatening the future of Kenya's sugar industry.
The appeal was made before the National Assembly Departmental Committee on Trade, Industry and Cooperatives on Wednesday, which is investigating the impact of sugar imports on local manufacturers. The committee is collecting views from industry players as it reviews policies governing sugar imports and their effect on domestic production.
Appearing before the committee, West Valley Sugar Managing Director Bernard Soi said local millers continue to invest heavily in the sector despite increasingly difficult market conditions. He argued that Kenya needs a predictable import policy that protects local producers while allowing imports only when genuine shortages occur.
"The Company has continued to operate and invest despite a difficult commercial environment. Lower domestic prices have compressed margins, increased working capital requirements and slowed returns on capital invested, affecting the Company's sustainability," Soi told the committee.
The company said it has invested about Sh1.5 billion in establishing and expanding its operations. Its factory has an installed crushing capacity of 2,500 tonnes of cane per day but is currently processing an average of 2,000 tonnes daily, equivalent to about 80 per cent of its capacity.
According to Soi, West Valley works with 9,859 contracted farmers cultivating nearly 4,971 hectares of sugarcane. The company also directly employs 927 workers while supporting another 1,823 indirect jobs through transport, contracted services and other activities within the sugar value chain.
The company told MPs it pays farmers within seven days after cane delivery, saying prompt payments have helped maintain growers' confidence and ensure a steady supply of cane.
However, West Valley warned that falling sugar prices have made it increasingly difficult for local manufacturers to remain profitable. It noted that the average selling price of a 50-kilogramme bag of sugar has fallen from about Sh9,000 in 2023 to approximately Sh7,000 in 2024 before dropping further to around Sh6,000 this year, even as production costs remain high.
The company also revealed that it is currently holding about 250 metric tonnes of sugar in stock, attributing the slow sales to the continued availability of imported sugar in the local market.
Soi maintained that imports should only be permitted when there is an objectively verified national supply deficit.
"West Valley does not support unrestricted sugar imports. The Company supports temporary imports only where an objectively verified national shortage exists and preferably through licensed local millers," he said.
The manufacturer further called for stronger enforcement against illegal sugar imports and the diversion of duty-free sugar into the local market. It urged the government to prioritise locally produced sugar before issuing import permits to protect investments made by Kenyan millers and improve returns for farmers.
Among the proposals presented to lawmakers were stricter enforcement against illegal imports, better coordination among regulatory agencies, improved traceability of imported sugar, continued support for factory modernisation and cane development programmes, and greater investment in value addition through cogeneration and ethanol production.
West Valley said these measures would strengthen the competitiveness of locally produced sugar, reduce dependence on imports and create a more sustainable future for the industry.
The parliamentary committee is expected to continue receiving submissions from other stakeholders before preparing recommendations that could shape future government policy on sugar imports and the protection of local manufacturers.