It was reported in the papers yesterday by Agriculture minister Hon Ruto that cane growers will only be given 30% shareholding on privatisation of sugar cane factories in Western Kenya.

This decision by the government was NOT received whole heartedly by cane growers in various factories in western Kenya, Because outgrowers supply 85% to 90% of the raw material to the factory which is considered to be a significant proportion of the input to the factory and hence must have control of ownership to the company. They MUST have more than 51% of the shareholding on their investments. They are enthusiastic and passionate about ownership of factories for ease of future decision making purposes.

They have asked Hon Ruto to shelve his ideas and make consultation with variuos stakeholders in various sugar factories in order to come up with decision which is in the best interest of the society.

Cane growers MUST also participate in sourcing for a competitive bidder and agree on valuation method at market rate to reflect the current market value of the investment before take over bid is done. This would give the public clear view on methods used to arrive at share price (par value)

Since majority of cane growers might not afford to take over the shares awarded to them because of scarcity of resources, the Government must work out a scheme to give loan to those cane growers the same way they gave loan to subscribers of Safaricom shares (IPO) in 2008. The president was already set so it must be applied through out the country as at when need arises.

The successful bidder will only be left with management of the factory in consultation with representatives of cane growers.

BY BOB AWITI OTANGE – URIRI CONSTITUENCY
NAIROBI BUSINESSMAN