Pan African Paper Mills on Verge of Collapse

Feb. 9, 2009 - East Africa's largest—and troubled—paper manufacturer, Pan African Paper Mills Limited, is on the verge of collapse due to alleged mismanagement, according to a news report published by Kenya Broadcasting Company (KBC).

Central Organization of Trade Unions (COTU) chairman Rajab Mwondi said that the Nairobi-based paper producer has over 8 billion shillings (approx. USD 101 million) in debts owed to creditors and operations at the Webuye mill (Western Kenya) have been brought to a halt due to the local power company shutting off its power supply.

KBC said that Pan African is believed to be worth more than 1.5 billion shillings (approx. USD 18.9 million)

Mywondi, COTU chairman and also the general secretary of the Kenya union of printing, publishing and paper manufacturers, is urging the government to intervene and save the industry and the over 30,000 people who depend on the mill for a livelihood.

The government is the largest shareholder in the company with 34% followed by Oriental Paper and Industries of India with 29% and The Biria Group of India with 25%, KBC said.

Pan African has a production capacity of about 127,000 tons per year and makes printing and writing papers and industrial packaging grades of paperboard. The company accounts for almost 60% of the market for paper and boards in Kenya.

SOURCE: Kenya Broadcasting Company (KBC).

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