PanPaper ready for reopening

The closed Pan Paper mills will be reopened next month.

According to industrialisation Permanent secretary Karanja Kibicho, the government is ready to clear debts owed to short term lenders to pave way for new management to take over.

PanPaper went under as a result of unpaid power bills and bank loans, with the short-term lenders, Barclays Bank, KCB, Bank of Baroda and Eco Bank appointing a joint receiver to manage the factory.

Mr Kibicho was speaking after holding a meeting with the Bungoma East District Development Committee led by Webuye MP John Sambu and the Webuye District Commissioner, Mr Adan Gedow.

According to records tabled in Parliament, the paper mill owes KCB Sh689 million, Barclays Bank Sh331 million, Bank of Baroda Sh200 million, Eco Bank Sh47.5 million and Development Bank of Kenya Sh67 million.

The banks have, on a number of occasions, resisted the move to reopen the mill before their debts are cleared.

The PS pointed out that the delay in the reopening of PanPaper was caused by the former leadership, which was tasked with the revival.

He blamed the former government taskforce leaders, Mr John Munguti and Mr Alexander Gatimbu, for failing to initiate revival plans.

“The government has pumped a lot of money in this revival process but we are yet to see results,” he said.

Mr Kibicho called on suppliers to start delivery to the factory in readiness for reopening.

The government has already released Sh1 billion for the factory’s revival, which Treasury says was used to pay electricity bills and salaries for the team that was working there.

Management of the factory said Mill Number Two, which processes pulped paper was vandalised beyond repair.

Production of paper at the mills, which had started in the early part of 2010 has stopped for lack of raw materials especially chemicals.