Kwale miller targets mass market with 500g of sugar

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Kwale miller targets mass market with 500g of sugar


International Kwale Sugar Limited [KISCOL] factory. PHOTO FILE | NMG

Summary

  • Kiscol, which currently sells in 50-kilogram bags, is targeting the retail market by packaging the sweetener in smaller units.
  • This is expected to increase competition in the retail sector, dominated by a few millers based in western Kenya.
  • The manufacturer is located in the collapsed Ramisi sugar factory and started crushing cane in August 2015.

A Kwale-based sugar factory, backed by Mauritius giant Omnicane, began modifying its packaging line to pack smaller retail units in early July, as the company targets the mass market.

Kwale International Sugar Company Ltd (Kiscol), which currently sells in 50 kilogram bags, says it is targeting the retail market by packaging the sweetener in smaller packages of 1kg, 2kg and even 500g.

This is expected to increase competition in the retail sector, dominated by a few millers based in western Kenya.

“We are currently working on modifying the line to package in smaller retail units. When you start, it’s good to start with big packages, ”said Harshil Kotecha, project manager at Kiscol.

Mr Kotecha said the cost of the adjustments will be known once the installation is complete.

Omnicane, Mauritius’ largest sugar producer, has a 25 percent stake in Kiscol. Its imminent entry into the retail sugar market places it in a direct battle with rivals such as Mumias, Kabras, Nzoia, Sony. Another Mauritian miller, Transmara Sugar, owned by Alteo, is also in the running.

The manufacturer is located in the collapsed Ramisi sugar factory and started crushing cane in August 2015.

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Kiscol is banking on the fact that sugarcane on the coast takes 12 months to mature, compared to 18 months in western Kenya to compete against its competitors and take advantage of the continuing shortages of sugar in Kenya.

Until December 2015, Kiscol crushed 260,000 tonnes of cane and produced 18,530 tonnes of sugar.

Kiscol’s turnover for the year 2015 was $ 12.45 million (1.245 billion shillings), according to Omnicane’s latest annual report. Kiscol recorded a loss of 57.546 million Mauritian rupees (Sh169.6 million) during the year under review.

The company’s entry into the retail market space will come months before the Common Market for Eastern and Southern Africa (Comesa) quantitative protection for Kenya’s sugar industry ends in February of l ‘next year.

However, protection currently limiting duty-free sugar imports to 300,000 from Comesa’s free trade has been renewed every two years since its inception in 2001.

Opening the market will spell the end for inefficient players, especially government-backed millers in western Kenya.

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