Pan Paper’s Receivers Hand over Assets to Tarlochan

Pan Paper Mills (In receivership) joint receivers have today officially handed over the mill’s assets to its new investor Tarlochan Limited. The handover ceremony held in Webuye follows the signing of a sale and purchase agreement between the receivers of the paper mill and the new investor.

The handover of Pan Paper assets effectively transfers the control of the mill’s assets and subsequent operations to Tarlochan Limited, a subsidiary entity of Rai group of companies. The purchaser has already indicated that they will invest an estimated Kshs 6 Billion in the next five to ten years in rehabilitating and reviving the ailing facilities. The Rai group has diverse interests in paper milling, agro-forestry, farming, wood processing, wheat milling, edible oils and fats, and sugar in the wider Eastern Africa region. In addition, the group operates a paper and pulp manufacturing plant in Tanzania.

Read: Webuye Residents Give Diverged Views on the Opening of Pan Paper

In addition to the handover of assets such as buildings, land and equipment, the new investor inherits a work force of nearly 150 employees largely deployed to guard the facility. The joint receivers indicated that employees’ arrears during the receivership period shall be processed and settled.

Speaking at the ceremony the joint receiver and manager, Mr. Muniu Thoithi stated; “Today marks an important milestone for Pan Paper.The handover is a lengthy process and we shall remain in the transition period to assist the new investors as they take over the management of the plant and the facilities associated with Panpaper.

Tarlochan Limited and Rai Group Chairman, Jaswant Rai has committed to revive the paper and pulp manufacturing operations of the plant, prioritise the absorption of current and former Pan Paper Mills workers and improve social amenities associated with the operation. “The handover process provides an opportunity for us to re-asses the plant and equipment. From our initial assessment, most of the critical machinery will require total replacement and technological upgrades to ensure that we can start operations within this calendar year.” Said…

The Rai Group of companies cites its purchase (in 2004) and eventual revival of South Paper Mills plant in Tanzania as a demonstration of its commitment to turn around one of Kenya’s manufacturing icon. Mufindi Paper Mills Limited, a company incorporated in Tanzania by Rai Group, rehabilitated the dilapidated assets of Southern Paper Mills and re-commenced operations in April 2005 on a production line manufacturing industrial packaging grades of paper. The line has been operational over the past decade and is currently operating at a capacity utilization of 160 % of the original installed capacity. The group has so far invested over USD 40Million in the Tanzanian operation on the back of a USD 1Million purchase price in 2004.