New Pan Paper owners to inject Sh6bn in the firm

The plan to revive Pan-African Paper Mills moved a step closer to realisation on Monday after the collapsed company was officially handed over to the new managers.

Tarlochan Ltd, a subsidiary of Rai Group of Companies and the new strategic investor, took over the Webuye-based paper manufacturer.

This followed the signing of a sale and purchase agreement between Pan Paper and Tarlochan.

At the handover ceremony in Webuye, Rai Group chairman Jaswant Rai said they were committed to the revival of the company and were only focusing on production of paper.

He said they had projected to inject close to Sh6 billion in the firm, particularly rehabilitation of machinery, in the next 10 years.

“The handover provides an opportunity for us to reassess the plant and equipment,” said Mr Rai.

“From our initial assessment, most of the critical machinery will require either replacement or technological upgrades to ensure we start operations this year.”

Mr Rai pointed out that long-term lenders were owed about Sh7.2 billion, which was written off.

He said the lenders counted their losses after securing the company’s assets but even after trying to recover their money they still had losses.

He added that, as a company, they were not ready to take liability for losses accrued from the debts.

The new investor said politicising the revival of the paper mill was uncalled-for since his company was committed to improving the economy of the town.

He claimed that those who were opposed to his bid were trying to gain political mileage, saying his company had won the bid openly.

“We are calling on all leaders to support the revival of the factory,” said Mr Rai.

“We placed our bid and it was deemed the best, and we take pride in what we do and we are committed to see the success of this miller.”

Mr Rai said he was not after the timber licence as alluded to by a section of leaders opposed to the revival of the plant.

He posed: “Why should we pay Sh900 million just to acquire a timber licence.”

Bungoma Governor Ken Lusaka said politics should be kept out of the revival plan, saying they were focused on the economic impact of the company.

Mr Lusaka said any politician who was against the revival of the miller was digging his political grave since the electorate would not want interference in any economic project.

Bungoma County Commissioner, Mohammed Maalim, said the government was committed to offering security to Webuye and the region in order to secure investor confidence.