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DRIVING GROWTH & PROFIT

The Strategic Value of Investing in
Giritu Sugar Ltd.

Market Overview

1. The Lucrative Opportunity in Kenya’s Sugarcane Industry

Kenya’s sugar industry is at a pivotal juncture, presenting a high-growth investment opportunity for forward-thinking investors. With a domestic sugar deficit of 218,000 metric tons (MT) annually and a rising demand driven by population growth and industrial needs, the sector offers immense potential for profitability and sustainability.

2. Growing Demand and Consumption

Kenya’s annual per capita sugar consumption stands at 1.7 kg per month, reflecting a steady increase due to urbanization, changing dietary habits, and the expansion of the food and beverage industry. The country’s sugar production, however, has struggled to meet this demand, leading to significant imports. In 2024, Kenya imported 455,000 MT of sugar, a 30% decline from the previous year, as domestic production surged to 750,000 MT. This upward trend underscores the untapped potential for local producers to bridge the gap and reduce reliance on imports

3. Export Potential

Beyond the domestic market, Kenya’s sugar industry holds promising export opportunities. The East African region consumes approximately 1.5 million MT of sugar annually, creating a lucrative market for high-quality sugar exports. Giritu Sugar Ltd is strategically positioned to capitalize on this demand, leveraging the premium-quality sugarcane grown in the Tana River Delta, which boasts a high sucrose content and rapid growth cycles.

4. Government Support and Reforms

The Kenyan government has implemented significant reforms to revitalize the sugar sector. These include the Sugar Act of 2024, which introduces a Sugar Development Levy to fund industry growth, and the write-off of Sh67 billion in debts owed by state-owned sugar companies. Additionally, the government has increased subsidized fertilizer allocations for sugarcane farmers, from 700,000 bags in 2023 to 1 million bags in 2024, further supporting production

5. Challenges and Opportunities

While the sector faces challenges such as droughts and infrastructure limitations, these have spurred innovation and investment in modern farming techniques, precision irrigation, and value addition. The integration of cogeneration power plants and ethanol production from sugarcane by-products presents additional revenue streams, enhancing the sector’s profitability.

Why Now?

Kenya’s sugar industry is poised for transformative growth, driven by rising demand, government support, and technological advancements. With projected production increases and a favorable agro-climatic environment, Giritu Sugar Ltd offers a strategic investment opportunity to capitalize on this growth. By investing in Giritu Sugar Ltd, you are not only securing a high-return venture but also contributing to the economic development of Kenya’s agricultural sector.

This market overview highlights the compelling case for investing in Giritu Sugar Ltd, positioning it as a leader in Kenya’s sugar industry and a driver of sustainable growth.

Tana River Delta Advantages

A Game-Changer in Sugarcane Production

The Tana River Delta stands out as a premier location for sugarcane cultivation, offering unique agro-climatic advantages that set it apart from traditional sugarcane-growing regions in Kenya. Here’s why this region is a strategic choice for Giritu Sugar Ltd:

1. Fertile Black Cotton Soil

The Tana River Delta is characterized by rich black cotton soil, renowned for its high fertility and excellent water retention properties. This soil type is ideal for sugarcane cultivation, ensuring optimal nutrient availability and robust crop growth.

2. Shortened Growing Cycles

One of the most significant advantages of the Tana River Delta is its shortened sugarcane maturity period. While sugarcane typically takes 18 months to mature in traditional growing areas like Western Kenya, the hot climate and favorable soil conditions in the Delta reduce this period to just 10–12 months. This accelerated growth cycle allows for more frequent harvests, significantly boosting productivity and revenue potential

3. Higher Yields per Hectare

The Delta’s agro-climatic conditions contribute to higher sugarcane yields, ranging from 110 to 160 metric tons per hectare (MT/Ha), compared to an average of 83 MT/Ha in Western Kenya. The combination of fertile soil, consistent water supply, and optimal temperatures ensures that sugarcane plants thrive, producing premium-quality cane with high sucrose content

4. Year-Round Irrigation

The Tana River Delta benefits from year-round irrigation, ensuring a consistent water supply even during dry seasons. This eliminates the risks associated with drought-related crop failures, providing a stable foundation for high-yield sugarcane cultivation. The region’s irrigation potential is further enhanced by the Tana River, which supports efficient water management systems like drip irrigation, reducing water wastage and maximizing crop yields

5. High Sucrose Content

The sugarcane grown in this region boasts a high sucrose content, making it highly desirable for sugar production. This premium-quality cane yields more sugar per ton compared to other regions, enhancing profitability and market competitiveness

6. Scalability and Expansion Potential

With the potential to double the plantation size, Giritu Sugar Ltd offers a sustainable and long-term investment opportunity. The integration of a modern sugar processing plant will further enhance efficiency, ensuring that the entire value chain—from cultivation to production—is optimized for maximum returns

7. Kenya’s Growing Sugar Deficit

Kenya’s sugar industry faces a 218,000 MT annual deficit, with domestic production unable to meet demand. Giritu Sugar Ltd is well-positioned to bridge this gap, producing high-quality sugar at competitive prices while also exploring export opportunities to the East African region, where annual sugar consumption stands at 1.5 million MT

Sustainability and Community Impact

Giritu Sugar Ltd is committed to environmental stewardship and community development. The project incorporates advanced irrigation and water management systems to minimize environmental impact while maximizing crop yields. Additionally, it aims to create employment opportunities and foster economic growth in the Tana River region, improving livelihoods and supporting local communities

Financial Projections

Investors can anticipate strong returns with projected revenues of $165.3 million, an IRR of 20.8%, and a ROIC of 31.3% by Year 5. These metrics underscore the lucrative potential of investing in Giritu Sugar Ltd

Conclusion

Giritu Sugar Ltd represents a game-changing investment in Kenya’s sugar industry. The combination of fertile land, abundant water, rapid growth cycles, and premium-quality sugarcane creates a unique opportunity for sustainable profitability. For investors seeking to drive growth and profit in the agricultural sector, Giritu Sugar Ltd stands as a strategic and rewarding choice.

By investing in Giritu Sugar Ltd, you are not only securing a high-return venture but also contributing to the economic transformation of Kenya’s agricultural landscape. This is an opportunity to be part of a visionary project that promises to deliver both financial success and positive societal impac

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References:
USDA
Foreign Agricultural Service
Kenya Sugar Board
Kenya National Bureau of Statistics
Sugarcane Production and Processing Investment Case, KAAA, 2016.
Overview of Sugar Industry in Kenya, SCIRP, 2019.
Tana Integrated Sugar Project, TARDA.
Tana Delta Locals Push for Sugarcane Project, Nation Africa, 2024.
Farmonaut, 2024. Revolutionizing Kenya’s Sugar Industry: Sustainable Farming Guide. Kenya Association of Manufacturers, 2021. Sugar Sub-sector Profile. Kenya Sugar Board, 2024. Sustainable Sugarcane Farming Guide. Tana River Development Authority (TARDA), 2023. Tana Integrated Sugar Project. Kenyatta University, 2016. Socio-economic Impacts of Sugarcane Farming. Kenyanews, 2024. Sugar Board Unveils Guide for Sustainable Sugarcane Farming.

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