Uncertainty looms over Kinyara’s take-over
<b>MARKET INTELLIGENCE</b><br>RAI Plywoods (Kenya) Limited has an uphill task if it is to take over Kinyara Sugar Works. Last month, the Kenyan firm won a bid to buy a controlling interest in the Ugandan firm.
By Reuben Olita in Nairobi
RAI Plywoods (Kenya) Limited has an uphill task if it is to take over Kinyara Sugar Works. Last month, the Kenyan firm won a bid to buy a controlling interest in the Ugandan firm.
They beat out South African-based UK firm, Booker International Agricultural Company on price although Booker was top in the technical evaluation.
Raiply, as it is popularly known by Kenyans, structured a deal in which it would contract technical support from Mauritius to bridge its lack of experience in running sugar plantations (a combination of an equipment supplier DCDM, and technical consultants).
The company’s personnel manager, Richard Nyamwalo, was surprised when we broke the news that Rai had bought a Ugandan company.
“It is news to me. I only handle human resource matters,†he said at his offices within the plant that is situated on 30 acres, three kilometres from Eldoret town on the Eldoret-Uganda road.
Other employees were equally surprised that such news could not be broken to them by the management which is dominated by the Kenyan-Asian himself and his sons.
It seems the purchase is a guarded secret between Rai’s sons who are directors of the firm, which has branches in Nakuru, Nairobi and Jinja.
After a three-week effort to get the company’s profile from the management in Eldoret and Nairobi, sources within the firm managed to leak the reason behind the decision not to release it.
All attempts to contact the Rai family proved futile. Getting the directors in any of the offices in Eldoret, Nakuru and Nairobi is like climbing Mountain Everest. Employees said none of the directors was always available because they preferred to operate from their homes.
Rai has left running of the firm to his sons, while he shuttles between Nairobi and India in search of other ventures. He is usually available once or twice a year. His wife is based at the Eldoret plant, but has nothing to do with the running of the firm.
Sources said there was a management deadlock between Rai’s sons, Jaswant and Iqbal, battling for top ownership of the firm. Jaswant is the current director but Iqbal wants to take over, a feat that has seen the matter move to court.
Rai senior is backing Jaswant for the top job.
The company has less than two months to raise $33m (sh61.3b) in cash according to the agreement signed when they won the bid.
“hat needs total co-operation. With the current bickering among the Rai brothers, there are possibilities that an injunction might be in the offing to oppose the intended purchase,†an employee said.
Plywood was started in the 1970s in Mountain Elgon by Mzee Rai himself. After falling to Iddi Amin’s brutal rule that saw Asians chased out of Uganda, Rai moved to Eldoret where he teamed up with a Mr. Shabir, another asian, to bolster the business.
Rai was left to operate the business alone in 1993 when Shabir and his wife were murdered under mysterious circumstances. This led to the change of name to Raiply with retired Kenyan president, Daniel Arap Moi becoming one of the shareholders. His close associate and then cabinet minister, Nicholas Biwott, also bought some shares in the company.
The Moi influence saw the firm acquire over 20 acres through forced evictions of those who had occupied adjacent plots to the firm.
The company produces veneer, plywood, chipboard, ceiling board, block boards, parquet, tiles, flush door, p.p. woven bags and foam mattresses.
Although they make polythene bags for the sugar industry, the firm lost big contracts from Sony Sugar and Mumias because their bags are sub-standard. That forced the company to stop producing them.
The firm specialises in wood manufacturing. Nilewood in Nakuru and Timsales in Nairobi both engage in wood manufacturing. The same applies to the Ugandan firm run by another of Rai’s sons.
Owing to the stalemate among the brothers, Philip Verjee, the current financial controller at the Eldoret plant, is running the show in anticipation that the two brothers would agree to agree.
The firm came to a near collapse in the late 1990s when it was put under statutory management owing to the same management deadlock. It called for Moi’s intervention to bring the firm back on its feet.
Employees are working without much morale. They earn Ksh150 per day after working for eight hours. There are three shifts of eight hours each.
Security is first class with KK security contracted to guard the firm’s property.
Employees are not even supposed to charge their mobiles within the firm. A memo by the personnel manager sighted an incident where employees turned the privilege into commercial ventures, charging mobiles for their customers at a fee.
November 7 is not far when Raiply are expected to forward their first installment of $33m to Uganda.
The impasse threatens to scuttle the company’s take-over of Kinyara Sugar Works.
Industry players in Kenya wonder why Booker was not given the bid to run Kinyara Sugar works.
The firm has a sterling history in Kenya. Between 1972-2003, the firm won the tender from the Kenya government to run Mumias Sugar. It was only until the Kenyan firm was privatised that they opted out of its management.
During their tenure, they grew Mumias Sugar from a cottage factory of 500 tonnes of sugar a day to 7,000 tonnes, making Mumias the largest sugar producer in East Africa. The firm currently meets 52% of Kenya’s 800,000 metric tonnes annual sugar requirement. Booker have also come with a fast- maturing variety that takes 15 months to mature compared to 18-24 months of the previous variety.
Ends
RAI Plywoods (Kenya) Limited has an uphill task if it is to take over Kinyara Sugar Works. Last month, the Kenyan firm won a bid to buy a controlling interest in the Ugandan firm.
They beat out South African-based UK firm, Booker International Agricultural Company on price although Booker was top in the technical evaluation.
Raiply, as it is popularly known by Kenyans, structured a deal in which it would contract technical support from Mauritius to bridge its lack of experience in running sugar plantations (a combination of an equipment supplier DCDM, and technical consultants).
The company’s personnel manager, Richard Nyamwalo, was surprised when we broke the news that Rai had bought a Ugandan company.
“It is news to me. I only handle human resource matters,†he said at his offices within the plant that is situated on 30 acres, three kilometres from Eldoret town on the Eldoret-Uganda road.
Other employees were equally surprised that such news could not be broken to them by the management which is dominated by the Kenyan-Asian himself and his sons.
It seems the purchase is a guarded secret between Rai’s sons who are directors of the firm, which has branches in Nakuru, Nairobi and Jinja.
After a three-week effort to get the company’s profile from the management in Eldoret and Nairobi, sources within the firm managed to leak the reason behind the decision not to release it.
All attempts to contact the Rai family proved futile. Getting the directors in any of the offices in Eldoret, Nakuru and Nairobi is like climbing Mountain Everest. Employees said none of the directors was always available because they preferred to operate from their homes.
Rai has left running of the firm to his sons, while he shuttles between Nairobi and India in search of other ventures. He is usually available once or twice a year. His wife is based at the Eldoret plant, but has nothing to do with the running of the firm.
Sources said there was a management deadlock between Rai’s sons, Jaswant and Iqbal, battling for top ownership of the firm. Jaswant is the current director but Iqbal wants to take over, a feat that has seen the matter move to court.
Rai senior is backing Jaswant for the top job.
The company has less than two months to raise $33m (sh61.3b) in cash according to the agreement signed when they won the bid.
“hat needs total co-operation. With the current bickering among the Rai brothers, there are possibilities that an injunction might be in the offing to oppose the intended purchase,†an employee said.
Plywood was started in the 1970s in Mountain Elgon by Mzee Rai himself. After falling to Iddi Amin’s brutal rule that saw Asians chased out of Uganda, Rai moved to Eldoret where he teamed up with a Mr. Shabir, another asian, to bolster the business.
Rai was left to operate the business alone in 1993 when Shabir and his wife were murdered under mysterious circumstances. This led to the change of name to Raiply with retired Kenyan president, Daniel Arap Moi becoming one of the shareholders. His close associate and then cabinet minister, Nicholas Biwott, also bought some shares in the company.
The Moi influence saw the firm acquire over 20 acres through forced evictions of those who had occupied adjacent plots to the firm.
The company produces veneer, plywood, chipboard, ceiling board, block boards, parquet, tiles, flush door, p.p. woven bags and foam mattresses.
Although they make polythene bags for the sugar industry, the firm lost big contracts from Sony Sugar and Mumias because their bags are sub-standard. That forced the company to stop producing them.
The firm specialises in wood manufacturing. Nilewood in Nakuru and Timsales in Nairobi both engage in wood manufacturing. The same applies to the Ugandan firm run by another of Rai’s sons.
Owing to the stalemate among the brothers, Philip Verjee, the current financial controller at the Eldoret plant, is running the show in anticipation that the two brothers would agree to agree.
The firm came to a near collapse in the late 1990s when it was put under statutory management owing to the same management deadlock. It called for Moi’s intervention to bring the firm back on its feet.
Employees are working without much morale. They earn Ksh150 per day after working for eight hours. There are three shifts of eight hours each.
Security is first class with KK security contracted to guard the firm’s property.
Employees are not even supposed to charge their mobiles within the firm. A memo by the personnel manager sighted an incident where employees turned the privilege into commercial ventures, charging mobiles for their customers at a fee.
November 7 is not far when Raiply are expected to forward their first installment of $33m to Uganda.
The impasse threatens to scuttle the company’s take-over of Kinyara Sugar Works.
Industry players in Kenya wonder why Booker was not given the bid to run Kinyara Sugar works.
The firm has a sterling history in Kenya. Between 1972-2003, the firm won the tender from the Kenya government to run Mumias Sugar. It was only until the Kenyan firm was privatised that they opted out of its management.
During their tenure, they grew Mumias Sugar from a cottage factory of 500 tonnes of sugar a day to 7,000 tonnes, making Mumias the largest sugar producer in East Africa. The firm currently meets 52% of Kenya’s 800,000 metric tonnes annual sugar requirement. Booker have also come with a fast- maturing variety that takes 15 months to mature compared to 18-24 months of the previous variety.
Ends