Cabinet approves Panpaper revival

What you need to know:

  • Ministers approve new plan to re-open troubled paper miller

The Cabinet on Tuesday approved a plan to revive troubled Pan Paper Mills, Kenya’s only paper-manufacturing firm and East Africa’s largest.

Details of the plan remain sketchy, but the approval will be met with joy by the 1,600 workers who have been idle since the factory collapsed last year.

Webuye MP Alfred Sambu, who has been among leaders pleading with the government to revive the factory, told the Nation on Tuesday this move is a giant step towards the firm’s full revival.

“I am happy with it, and we can now move ahead and have everything back to normal,” he said in a brief telephone interview.

Pan Paper was closed in March, last year, under a mountain of debt, with its 1,600 permanent and 30,000 casual workers being sent home, the latter with 30 per cent pay.

The electricity had also been disconnected due to a Sh209 million bill, but it has now been reconnected, and the firm is “selectively manufacturing” some paper, Mr Sambu said.

The cabinet last year passed a resolution on the plant’s reopening, but nothing seemed to have come of it by the end of the year.

In August, last year, the Kakamega-based Masinde Muliro University asked to be allowed to revive the company, but the proposal was rejected on the ground that the institution was yet to come up with a business plan for turning the plant around.

When it closed its doors, the firm needed about Sh2.2 billion for its revival, and Mr Sambu said he and his colleagues had asked for Sh1.6 billion.

But Treasury allocated Sh500 million during the reading of this financial year’s budget. The government would be expected to inject some Sh1.1 billion.

Mr Sambu said only three parts of the plant are working, the fourth having been vandalised. The money, he added, would be used to buy spares and have it working again soon.

“We are moving, and hope all will be well so we can invite the president to open it officially, hopefully next month,” he pointed out.

He said about 500 employees are back, most of them managers.

The first cabinet meeting in two and a half months also approved the ratification of the East African Community Common Market agreement.

The Kenyan cabinet is the second in the region to do so after Tanzania’s.