Paper Industry News
Paper mill recovery hinges on cheaper energy
Tuesday, 02, Feb 2009
Committing a half billion shillings to revive Pan Paper Mills may be good news for the politicians, but long term interests of the direct beneficiaries of the paper factory may still be in jeopardy because major issues touching on operational costs have not been addressed.The previous management that abandoned the factory when creditors came knocking put its power costs at 33 per cent of the total operational costs.
This is the highest single operational cost and does not even factor in the heavy diesel the company uses to run some of its boilers.Costs and alleged poor management resulted in the company being put under receivership last year.Some 4,000 permanent workers and 32 casuals lost their jobs.A primary and secondary school for the workers was closed and the Webuye Town Council almost ground to a halt for lack of business.The closure has had extreme social and economic effects on the area.
