Rai family, the empire that decides how sweet your tea is

The Rai family imported 187 million kilos of sugar last year.

West Kenya Sugar Company chairman Jaswant Rai (right) and managing director Tejveer Rai. PHOTO | FILE | NATION MEDIA GROUP 

IN SUMMARY

  • The sugar business is an offshoot of the Rai Group, a multi-billion-shilling family business that spreads across East Africa.
  • The family is believed to have had close ties with the ruling elite of the Moi, Kibaki and Kenyatta administrations.
  • West Kenya Sugar Company imported 34 million kilogrammes of sugar last year. but, overall, Raiply-associated businesses imported 187 million kilogrammes
  •  The company also imported more than one million kilos of brown sugar from Mozambique’s Tongaat Hullet

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Out of the six easily recognisable members of the Rai family, Mr Tejveer Rai, the Safari rally enthusiast and alumnus of City University, London, is perhaps the most well-known to the public.

But the engine behind him is his tycoon father, Mr Jaswant Rai, who is also the chairman of Rai Group Limited.

While the younger Rai, who is the managing director of West Kenya Sugar Company, cuts the image of a calm boss who prefers to operate from the behind the scenes, the many accusations of cane poaching that the family firm faces in western Kenya betray a shrewd operator.

His father, often, leaves the running of the show to him.

Those who have closely interacted with him say Mr Tejveer is ordinarily a calm man who spends much of his time travelling out of the county on business trips.

He has been credited with aggressively expanding the family’s sugar business since he took over its operations eight years ago.

RAI GROUP

The sugar business is an offshoot of the Rai Group, a multi-billion-shilling family business that spreads across East Africa.

The family is believed to have had close ties with the ruling elite of the Moi, Kibaki and Kenyatta administrations, and has interests in cement production (Rai Cement), edible oils and soaps (Menengai Oil Refineries), sawmilling (Timsales), wheat farming, horticulture and real estate (Tulip Properties).

To most Kenyans, the family came to limelight only when it acquired the troubled Pan Paper Mills in Webuye for Sh900 million. Pan Paper is worth Sh18 billion, but it was indebted to the tune of Sh10 billion at the time it was placed under receivership in 2009.

When he came out to defend his sugar business earlier this week, Mr Tejveer Singh Rai was worried by the damage his Kabras Sugar brand had suffered after detectives seized thousands of kilogrammes of contraband sugar in Nairobi’s Eastleigh neighbourhood.

BUILD REPUTATION

For several years, Mr Tejveer has aimed to build the reputation his West Kenya Sugar Company and, he says, because of the market reputation of his Kabras brand, his company’s products are “often a target of counterfeiters and unscrupulous traders and packers”.

However, even as he defends his brand, Mr Tejveer is the face behind most of the sugar imports into Kenya, and records show that in August alone last year, he imported 34 million kilogrammes of sugar, worth billions of shillings.

Although he is well known in the sugar circles, Mr Tejveer is perhaps known because of his famous grandfather — the late billionaire Tarlochan Singh Rai, who built a fortune in Belgian Congo (now Democratic Republic of Congo) after purchasing tea and coffee estates from fleeing Belgians in the 1960s.

That was before the family settled in Kenya and incorporated Raiply in December 1971 to “acquire forest concession rights and establish… the business of sawmillers, manufacturers of plywoods, veneers… and household furniture”.

SUGAR BARONS

This week, Mr Tejveer found himself in an awkward position as some politicians in the sugar-growing western Kenya region called for the closure of his multi-million venture.

The move has divided politicians in the belt, with former Senator Bonny Khalwale leading a pro-West Kenya Sugar demonstration. Mr Khalwale tweeted that it was the “sugar barons” who wanted to close down Tejveer’s factory.

In the league of Kenyan billionaires, the Rai family sits near the top — and of late has made a fortune from the sugar business.

Mr Tejveer’s father, Jaswant, was one of the major shareholders of the Rai Group. Other shareholders in the firm at one point included President Moi’s Kabarak Limited.

Documents in our possession indicate that West Kenya Sugar Company imported a total of 34 million kilogrammes of sugar last year but, overall, Raiply-associated businesses imported 187 million kilogrammes by taking advantage of the duty-free window opened by the government last year.

INTEGRITY

Mr Tejveer has told the media that the “poisonous” sugar did not belong to his firm, and that samples of the sugar his firm imported are being tested for toxicity. “We have no doubt that the results will confirm the integrity of our products,” he said in a paid advert in all the dailies on Wednesday.

Earlier this month, detectives from the Directorate of Criminal Investigations (DCI) seized 2,000 bags of sugar in a warehouse in Eastleigh. Scientists from the Kenya Bureau of Standards later said it was “unfit for human consumption” as they had found traces of mercury and copper in it.

While we have no evidence that this Eastleigh consignment belonged to Mr Tejveer, we have ascertained that in August last year, West Kenya imported more than 21 million kilos of brown sugar through their agent, Siginon Group Limited, a company associated with barons of the Kanu era.

This sugar was exported by a Dubai company, Tak Holdings. Documents seen by the Nation indicate that this sugar was from Brazil, but unlike the sugar from the family’s other company, Menengai Oil Refineries, which is listed as “fit for direct human consumption”, the documents from West Kenya are silent on the Brazilian brown sugar.

MEMORABLE TREATS

The company also imported more than one million kilos of brown sugar from Mozambique’s Tongaat Hullet, although Mozambique is a net importer of sugar. Tongaat Hullet is a company based in South Africa and has a mill in Mozambique.

West Kenya Sugar workers said Mr Tejveer, the father of three sons, gives them memorable treats every time his wife delivers a new baby. “He brings us bread and milk and gives us some presents. He is a nice boss but expects everybody to take their work seriously,” said an employee at the sugar factory

The miller has expanded operations to Busia County with the construction of the Olepito Sugar Company and is currently constructing another factory in Naitiri market, Bungoma County. West Kenya Sugar is also operating the Sukari Industry in Ndhiwa, South Nyanza.

In all these regions, his entry has invariably been dramatic as existing players accuse his factories of poaching their canes.

TROUBLED MUMIAS SUGAR

West Sugar has in the past locked horns with the management of the now financially troubled Mumias Sugar – and the management of nearly all other state-run factories in every region it enters – over suspected theft of raw materials.

 Since he took over the stewardship of the factory, Mr Rai has expanded the miller’s operations to Busia, Bungoma, Trans-Nzoia and parts of Nyanza. He is currently recruiting farmers in Bungoma to improve cane supply to the factory.

Reporting by Benson Amadala, George Omondi and John Kamau

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