The Economy of Webuye: the Pan Paper Fallacy

Current Attempts to Resurrect Pan Paper

The dead Webuye Pan Paper Factory that had long been forgotten and turned into a ghost since February 2009 has a new lease of life.

President Uhuru Kenyatta has assured employees, investors and stakeholders of the Paper factory would be revived as part of Jubilee Administration’s promise to improve the lives of Kenyans.

“Today is a great day marking the start of the revival of this Mill. This mill has for the last decade been plagued by massive debt, and improper management, all of which have conspired to deprive Bungoma, and Western Kenya more widely, of the jobs and prosperity it deserves.

The handover of the Mill to the new investor is scheduled to happen next week; and plans are to re-start its operations within the next three months.

The investor has also pledged to inject over the next few years 60 million US dollar, which, at the current exchange rate, is about 6 billion Kenya shillings,” announced Uhuru.

This will be the fifth time the government – The President Mwai Kibaki and Prime Minister Raila Odinga and now the Jubilee Government – after the plant was placed under receivership of the Government amid its bid to revive it and pay off the debts owed to the long term and short term lenders.

Since its closure, more than 1,400 former Pan Paper mill workers, lost their jobs and have been left jobless since then.

However, President Uhuru seems to assure them, “The good news also is that the investor has given an assurance that former employees of Pan Paper Mills will be given priority as the initial employees to be re-absorbed into the business.” Ironically, with 1,400 employees rendered jobless, it will be interesting to know how the plant will, “Yield close to 1,500 jobs for the people of Bungoma and Western Kenya within the next 3 years.

Read: Investing in Agriculture in Bungoma County.

How Webuye went down with Pan Paper

Webuye remained a tale of a true ghost town that long lost its glory with the coming down of the then source of the town’s grace, Webuye Pan Paper. It is now seven years since the factory went into oblivion. Residents were left with only some tattered shreds of hope of either the National Government or the County Government of Bungoma coming out one day and bringing the company back to life. Close to 1500 people who were directly depending on Pan Paper for livelihood lost their jobs, shopping centers that were beaming with life closed down, families broke, education was affected and the town curled its tail, like an elephant, full of potential but slowly rotting from within.

The mills that used to keep the town alive with their unending sound went dead. Even the smell that used to notify any stranger that Pan Paper was alive and kicking is no more. Servant quarters that used to glitter with white wash as families moved here and there are now occupied by monkeys and shrubs with insects checking in with their shrieks every nightfall. Bars closed. Hotels no longer cooked food. Bodaboda operators started living on the hope of other passengers coming by. Even the evening ladies, who use to make their living had nothing to fall back to.

At the moment, for any curious visitor Webuye is a town where a skilled machine operator, an out-of-work shopkeeper as well as hotelier, a worried parent and a scared businessman tell the same story, the story of no money at all.

Read: Investment Opportunities in Bungoma County.

Fallacies surrounding the opening of Pan Paper

The opening of Pan Paper has been surrounded with fallacies since the year 2011.

• In 2011, the government released 1 billion shillings for its revival. The plant started production on a Saturday October 22nd 2011 after a closure of more than two years after its first re-opening in 2010 on July 28 by Former President Mwai Kibaki.
• The factory was grounded to a halt after two weeks when three of the mills failed. Then, it had only managed to produce 40 tonnes of paper through the paper production machine number 3 which was half its average production per day that was normally 80 tonnes.
• With its revival, two of the four mills at the factory were shut again just a few days later leaving more than 400 people who had been recalled jobless

When the factory went down two weeks after taking off, some of the issues that were cited and had not been taken care of were: