Miwani: The abandoned giant miller that pioneered Kenya’s sugar industry

The journey from Muhoroni to Miwani is harrowing: a shaky and rackety voyage into the interior of what was once Kenya’s most promising sugar belt.

The road is a moniker of what has gone wrong in the sugar industry, and on both sides are thousands of acres strewn with unkempt fields that once fed Kenya’s sugar industry.

Here, indolent pedestrians make surprised glimpses at any motorist daring enough to use this spring-breaking road. A few traces of tarmac can be seen—the only evidence available of an attempt to have a road network within the plantations.

Today, only tractors and motorbikes are able to navigate this lunar resembling surface where some locals still hold on — hoping that they would once break even as cane farmers.

Our crew had to stop more than once to help small cars stuck in giant pits of mud. Ironically, one was from the defunct Miwani Sugar Company, the miller that was at one point owned by jailed fraudster Ketan Somaia, and went quiet in 2001.

From a distance, the rusty metals, the old smokestack and overgrown vegetation around the collapsed miller gives the impression of an abandoned historical site.

One gate is firmly closed and the grass has grown on the 18 parking lots - once reserved for the top managers. The compound has some old jacaranda trees, and is overrun by innumerable creeping plants.

A nearby school, once a preserve of children of the middle-class working in the area, is in a shambles. A 260-bed hospital that once saved lives in the area is in dire need of salvage.

Operations manager now curator

Once known as Victoria Nyanza Sugar Mills, Miwani —Kenya’s premier sugar factory — is today more of a museum, a far cry from the company where in 1922 the Devji Hindocha family purchased the enterprise and established a commercial mill thus turning it into one of the most successful in the region.

By 1946, Miwani was producing 20,000 tonnes of sugar from its 15,000 acres. It also employed 4,200 people making it one of the biggest in the region.

Seventy years later, and for the last 15 years, the giant miller that pioneered Kenya’s sugar production long before independence lies dead. It’s the third time the mill went quiet but this time has been the longest and the most devastating.

At the abandoned mill, we found Jack Otsembo who used to be the operations manager, but whose role has been reduced to that of a curator of the abandoned structures.

Mr Otsembo has mastered the ways inside the this dead titan. In his office are small jars containing the last grains of sugar that Miwani milled, preserved like treasured mementoes, on a table near the door and which allows him to reflect on the good old days and hopes – just like the sugar farmers- that this mill will one day billow out some smoke.

Mr Otsembo speaks softly, nay gently, about his days as a real operations manager. He has seen the miller collapse thrice – and twice it has returned from the dead. “This is the longest closure,” he says of the 15- year wait.

He then takes us through the rusty network of metals, weak walls of the boilers, helping us create a mental video of a running mill.

East Africa’s sugar industry founder

It was in Miwani where the foundations of East Africa’s sugar industry were laid in 1924 when Australian Sugar Magnate, George Russell Mayers, established Victoria Nyanza Sugar Company which farmed approximately 15,000 hectares. By 1928, Kenya had five sugar factories located at Kibos, Miwani, Muhoroni, Ruiru and Ramisi – but by far, Mumias was the largest.

So promising was this enterprise that in 1947 Devjibhai K. Hindocha, the sugar baron stationed in Uganda, bought the estate and sugar mills, moved there with his family, and changed the name of the Company to Miwani Sugar Mills (K) Ltd. His son, Magahbhai D. Hindocha, became the managing director.

Hindocha arrived in Miwani with experience from Uganda’s Kakira Sugar Company – still the largest in Uganda - where he was a partner.

The company had three plantation under cane namely -Miwani of 9,300 acres, Chemelil of 4,252 acres and Kibigori of 543 acres.

But shortly after independence, the government decided to interfere with this estate by taking over Miwani’s Chemelil estate to start its own factory.

Chemelil disaster

The setting up of Chemelil Sugar Company was a disaster – an experiment that went wrong and is today hidden in government documents.

“The planning in itself was superb, but the implementation was hurried,” complained J.K arap Cheruiyot, a regional MP at the East African Community.

Part of the problem was that the crop was ready before the factory was set up and thousands of acres were littered with “useless cane”.

Again, Chemelil was unable to cater for all the farmers who had been enticed into the scheme and as a result they lacked transport and got into debts.

“The lucky ones are those who refused to participate in this government sponsored project,” wrote Cheruiyot in a confidential letter to Bruce McKenzie, the then Agriculture minister.

When the idea of Chemelil was mooted in 1964/65, the Hindocha family was approached to sell their 5,000 acre Chemelil Estate to form the nucleus for the new government-run factory. In return they were to get 5,500 acres in “Luo land units.”

From the onset, the government brought in a German co-operative adviser, Mr J. Prassel to work on the Chemelil sugar but although bureaucrats in Nairobi thought he had performed well and wrote letters asking for an extension of his contract, it is now known from other official correspondence that Chemelil was being treated as a failure in government circles.

As the Booker Tate-managed Chemelil dithered, so did Miwani which was running under-capacity and by 1973 an alarm was raised in Parliament over the survival of the privately-owned Miwani and the Mehta Group-managed Muhoroni, which was jointly owned by the government and other investors.

Parliament was once told that the Mehta management contract was a “rip-off” and that the mismanagement of Muhoroni was enormous. But every year, they would get an extension until June 1990 when it was abruptly terminated.

Cheap sugar

By then each factory had been assigned its operation zone, a radius of more than 25 kilometres, to ensure that all of them operated at full capacity.

Over the years, this zoning was abandoned and factories poached cane from each other and the Hindocha family which had taken a Ksh450 million ($4.4 million) loan from the Agriculture Finance Corporation (AFC) was unable to pay.

The miller had close to 8,000 acres under cane and light rails locally remembered as lokoloko that were used to transport cane to the factory. It had the first distillery in 1962 and they were the first to have a refined plant. 

In 1988, Miwani finally closed doors as the Madhvani family also closed down the Ramisi Sugar in Kwale as both struggled with imports of cheap sugar into the country. By that time, both factories were producing only five per cent of Kenya’s sugar.

The exit of the Hindocha family saw the arrival of a cunning Kisumu businessman Ketan Somaia, now jailed in London for theft.

Somaia arrived in Miwani in 1988 with a classic tale of the revival of the sugar mill and had promised to settle the Hindocha debts to the AFC. Parliament was later told that he didn’t.

“He did not pay and he is not going to pay. That is why he operates from Dubai. He is a conman,” said Webuye MP Alfred Sambu. The then Agriculture minister Chris Obure only said that he had “reason to believe” that Somaia paid because he was given the Miwani shares but he could not table any documents.

From the eighth floor of Dubai’s Arbift Tower, a 23-storey building facing Dubai creek and now known as Al Masraf Tower, Somaia lured his would be victims with promises.

One of these was British-billionaire Murli Mirchandani who once gave Somaia Ksh2.3 billion ($22.7 million) without any paperwork. It was part of the money that was to be invested in Miwani’s revival, but it wasn’t because Somaia was a fraudster – a conman.

Somaia operated Miwani through an offshore company, Venessa Associates. “He has put very inefficient managers in that place,” said Mr Obure to Parliament.

Yet, the government entered into a partnership with Somaia to ostensibly revive the mill and he would fly the government appointed directors to Dubai for meetings. Somaia had 49 per cent stake.

Two years later, the businessman rallied others to acquire majority stake as the government retained 49 per cent. Miwani started off in July 1991 and in 2001, it went down again.

In one of these Dubai meetings, it was agreed that Miwani should take a loan of Sh100 million “to improve the level of their working capital.”

The reason why government officials went to meet Somaia in Dubai in 2000 was because the Parliamentary Accounts Committee was looking for him over several fraudulent activities.

Menial jobs

Much of the borrowed capital was never injected into Miwani – and soon it stopped crushing cane. Somaia fled the country and left his sugar empire in flames – and thousands of farmers in limbo.

It is now known that Somaia had acquired Miwani for free and by the time he fled, Miwani owed creditors Ksh2 billion ($19.7 million) and farmers Ksh500 million ($4.9 million) for cane delivered, crushed and never paid.

During the same period, Muhoroni was also under receivership under the current Kisumu Governor Jack Ranguma and Ndungu Gathinji – who were among the first receiver managers in the miller.

Though Ranguma’s tenure was controversial, he managed to revive the mill before it collapsed again.

Miwani’s collapse also led to the collapse of the local social networks. Over 700 workers were left jobless. Children dropped out of school creating a generation of illiterates now doing menial weeding and harvesting jobs. The road was abandoned and the local market shrank.

The operations manager recalls the days when a truck would go round the classified estates distributing milk to the workers and teachers on the company’s pay roll.

The straight road stretching from the factory to the estates is wasting with vegetation. That life has been hard is noticeable.

Public vehicles have abandoned the dilapidated Kisumu-Chemelil-Muhoroni route. The residents who had relied on the Miwani hospital have to travel at least 30 Kilometres to Kisumu town for treatment.

As the debate about the revamping of the sugar millers rages on, Miwani people have almost lost hope of quality life.

“We have seen a whole team of MPs visit here and officials from the ministry come with notebooks like yours but no results. If even the road here cannot be repaired, don’t you think we are forgotten? I was farmer here but look at me now…,” a farmer tells us as we stop over the centre on our way out of the forgotten giant of sugar milling in Kenya’s history.

READ: How Kenya’s big sugar experiment turned sour, trapping farmers in poverty

-Business Daily