After more than fifteen years of waiting, a sense of relief has finally reached the former employees of the Panpaper factory. The national government has allocated 230 million shillings to pay their long-overdue dues, a decision that comes as a major relief to those who have endured significant hardship since the factory’s closure.

Principal Secretary for the State Department of Industry in the Ministry of Investments, Trade, and Industry Dr. Juma Mukhwana, confirmed the allocation during a visit to the Rai Paper factory, where he held a private meeting with the management. The PS stated that the funds were specifically designated for the former employees of the now-defunct Panpaper factory.
Local leaders have welcomed the news while also emphasizing the need for a fair process. Martin Pepela Wanyonyi, the area’s Member of Parliament (MP), stressed that the process of identifying the beneficiaries must be transparent. This sentiment was echoed by Maraka Ward Representative, Ali Machani Mutoka, who urged the former employees to use the funds wisely once they receive them.
For many, this financial settlement is not just about money; it’s a recognition of their years of service and the struggles they have faced. Several former employees expressed their gratitude to the government for finally addressing their plight, noting the difficult times they have faced since losing their jobs.
PS Mukhwana also challenged the management of the Rai Paper factory to improve its services and create more jobs for local residents. The factory’s director, Juan Rai, responded by requesting government support to implement strategies for the factory’s continued growth, highlighting the potential for future collaboration to boost local employment.
Pan African Paper Mills (Panpaper), a major paper manufacturer, was once the economic cornerstone of Webuye town.The factory struggled for years due to a combination of factors, including mismanagement, a government ban on logging that impacted its raw material supply, and mounting debts.It was finally placed under receivership in March 2009, leading to the loss of thousands of jobs and a severe economic downturn for the town and surrounding areas.
After a seven-year period of dormancy and failed attempts to revive the factory, the Kenyan government sought a new strategic investor.In 2016, the Rai Group of Companies, a prominent Kenyan conglomerate with vast business interests in timber, sugar, and manufacturing, acquired the Panpaper assets.The Rai Group’s subsidiary, Tarlochan Limited, purchased the factory for a reported Ksh 900 million from the receiver managers and lenders. This figure was a fraction of the factory’s previous valuation.The acquisition was part of the government’s plan to revive the factory and bring economic life back to Webuye.
Following the acquisition, the factory was rebranded as Rai Paper.The Rai Group committed to a significant investment, reportedly around Ksh 6 billion, to rehabilitate the plant and resume operations.The factory was officially relaunched in late 2016 by President Uhuru Kenyatta.
While the revival was celebrated, Rai Paper has faced its own challenges. The factory has been operating on a much smaller scale than its Panpaper predecessor, employing fewer workers.It has focused on producing different products, such as packaging paper, by recycling waste paper, as it works towards full-scale production.The Rai Group, led by chairman Jaswant Rai, has continued to be a major player in Kenya’s industrial sector. The company has also been involved in other high-profile lease agreements, such as the one for the Nzoia Sugar Factory, which has also been subject to public debate and scrutiny
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