On 14 April 2022, Justice Mabeya, of the High Court in Kenya cancelled a 20-year concession that had leased Mumias Sugar assets to Sarrai Group in December 2021.
The termination came after a series of court cases that had accused Sarrai Group of illegally and fraudulently winning a bid offer in a process – headed by Kenya Commercial Bank (KCB)’s receivership manager P V Rao – that had failed to consider other creditors, consult the Competition Authority of Kenya and explain how Mumias would repay its creditors, among others.
Whereas the cases had played out in Kenya, it touched Uganda as a country because Sarrai Group, which has operations in Uganda, Kenya and Malawi, among others, had promised to afford Uganda an opportunity to enter into Kenya’s sugar milling industry through Mumias Sugar, one of the region’s largest millers.
In fact, even after terminating the concession, Sarrai Group refused to give up easily, continuing its operations, which, however, in April 2023 resulted into a court fine of UGX 2.84 million of Sarrai owners, including Sarbjit Singh Rai for contempt of court.
The fight for Mumias in Kenya seemed to be a pride parade of sorts with Kenyans saying the miller was too strategic to be handed to a foreign company, while Ugandans felt it largest trade partner had yet again pulled the usual excuse from its playbook to deny a Ugandan company an opportunity to trade in its market.
Beyond this, different voices in Kenya wondered who were the faces behind Sarrai Group and how a little-known entity in the Kenyan market had won such an important bid.
Thus, what appeared to be a battle over who controls Mumias, had raised valid questions but helped outsiders to have an insight into an ambitious expansionist agenda in which Sarrai was diversifying into new sectors including cement manufacturing and mining.
Having lost the ball on Mumias, Sarrai cast its nets elsewhere and after months of negotiations, on 5 March 2024, Kenya’s Bamburi Cement announced it had completed the sale of its 70% stake in its Hima Cement subsidiary for an estimated $84 million (UGX 308.3 billion) to a consortium of Sarrai Group and Rwimi Holding.
The new acquisition meant that Sarrai had now diversified its portfolio further into cement manufacturing with the purchase of Bamburi’s 1,335,600 ordinary shares in Hima Cement.
With sight firming on further expansion, in 2022 Sarrai Group applied in a process in which the government of Uganda sought to concession Kilembe Mines to a strategic partner for redevelopment.
The concession seemed to be a targeted move into more diversification that would launch Sarrai into mining.
Thus, on Monday, the Ministry of Finance announced it had completed the bidding for Kilembe Mines in which Sarrai Group and its subsidiary, Nile Fibreboard had come out as the best joint bidders.
Not much is known about Nile Fibreboard, however, available information indicates the company was launched in 2019 by President Museveni, and is into manufacturing medium density fibreboards, decofloor, pre-fabricated houses and edge banding tapes.
At least 14 companies had expressed interest in the redevelopment of the mines in the western District of Kasese.
Sarrai Group is expected to re-engineer production of copper cathodes and cobalt metal, which are critical in the transition to clean energy, in addition to driving Uganda’s industrialisation, job creation and support to local mining operations.
For Sarrai Group to take on a project such as Kilembe Mines, which is in urgent need of huge capital injection, tells of the company’s capital capabilities and its desire to diversify into capital intensive sectors of the economy.
Speaking at the signing ceremony, Mr. Rajbir Singh Rai, Managing Director of Sarrai Group expressed the company’s commitment to Uganda’s mining vision: “We are honored to be entrusted with the implementation of this historic agreement, and we look forward to making Kilembe Mines a model of excellence for Uganda’s mining industry.”
As part of this agreement, Sarrai Group and the Uganda National Mining Company will work together to increase investment in mineral exploration to extend the life of the mine, and establish associated local processing industries to maximize the economic benefits from the mine.
The new investment takes it away from its traditional stables of sugar, plywood, cement manufacturing, electricity and ethanol production, to a totally new area.
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Amanda Ayebare, AutoXpress CFO: Balancing Survival and Growth in the Adventurous SME LandscapeUnder the chairmanship of Sarbjit Singh Rai, Sarrai Group, which has its headquarters in Kampala, Uganda, is one of the most diversified companies in East Africa, operating 11 subsidiaries in Uganda, Kenya and Malawi.
In Uganda, it operates eight subsidiaries, among which include Kinyara Sugar, Hoima Sugar, Nile Plywoods, Nile Fiberboards, Tasco Industries, which is into soap and cooking oil production, Engaano Millers, Vitafoam, and Hima Cement.
While in Kenya and Malawi, the company operates three subsidiaries – Comply Industries and Rai Cement in Kenya and Raiply in Malawi.
The company has also previously shown interest in investing in the Burundi sugar milling industry by acquiring a stake in SOSUMO, which in April 2023 started assessing the company’s assets and negotiating terms of partnership.
Little is known about Sarbjit Singh Rai, but he is linked to a multi-billion Kenyan Rai family, from which he broke ranks to start a single timber processing company in Kenya by establishing extensive forest plantations, before growing into one of the largest industrial groups in East Africa, with a footprint in Malawi.
It is difficult to understand the workings of Sarrai Group and insiders at Hima Cement say the people behind Sarrai, most of whom are family business, “are not keen on publicity”.
In fact, they cite the recent acquisition of Hima Cement in which despite being the buyer, Sarrai Group did not make a single statement with much of the communications coming from Bamburi and Holcim, the seller.
Stepping into the family business
As the key figure behind Sarrai, Rajbir Singh Rai has held various key positions within the Group’s subsidiaries, among which include serving as a director in Kinyara Sugar Works, Uganda’s second-largest sugar producer.
As a director, he not only oversaw sugar production operations but also represented the industry in policy discussions such as advocating for regulatory amendments on behalf of the Uganda Sugar Manufacturers Association.
His responsibilities have spanned other group businesses as well. He is a registered shareholder of Sarrai Group, alongside his father Sarbjit and brother Amaanraj Rai.
His position places him as a key at the helm of different ventures in sugar, plywood and cement, among others and he is involved in the group’s Kenya-based ventur.
He is also linked to Rai Cement in Kenya, which illustrates his active participation in the expansion of the family’s cement and infrastructure businesses across borders.
One of Rajbir’s most prominent roles is his current position as managing director of Hima Cement, which he assumed in 2024, following the recent acquisition of the Kasese-based cement manufacturer by Sarrai Group.
Under Rajbir’s stewardship, Hima Cement has been undergoing a transition from being a subsidiary Bamburi, itself a subsidiary of Holcim, to an entity under local family ownership.
Industry observers note that Rajbir’s leadership involves leveraging synergies with Sarrai Group’s other operations – for instance, using the group’s regional network to boost cement distribution and exploring efficiencies by sharing infrastructure with sister companies.
He has also emphasized continuity of Hima’s growth projects, in which the company recently expanded its capacity with a new plant in Tororo (opened in 2018) to reach about 1.9 million tonnes annual cement output.
As MD, Rajbir is responsible for navigating competitive pressures in Uganda’s cement industry while maintaining Hima’s position as the second-largest cement producer in the country. His leadership is marked by a focus on product quality and innovation, as well as community engagement, in line with the legacy of Hima Cement’s prior management.
