Kenya’s President Uhuru Kenyatta’s family company Brookside Diary Limited has taken over the operations of Diary Corporation from the Indian-owned Sameer Agriculture and Livestock Limited (SALL).
The Sunrise has reliably learned that Brookside bought Sameer’s total shareholding of 90% in the company about a month ago, at Ushs3.2 billion setting the stage for the expansion of Kenya’s leading diary producer into the Ugandan market.
But advent of Brookside has sparked outrage among government officials and farmers after it was revealed that Sameer sold its stake just months after securing an extension of its lease from 10 to 40 years.
Besides concerns about the SALL’s lack of transparency in its transactions with Brookside, the entry of the Kenyan company has raised concerns of a monopoly situation as East Africa’s biggest diary producer takes foot in Uganda.
A document seen by The Sunrise shows that Brookside will operate Diary Corporation for the next fourteen (40) years. The sale of Sameer’s stake, at a yet undisclosed fee, came months before the expiry of its lease agreement with the Government of Uganda.
The government of Uganda leased the assets of Diary Corporation in 2006 to Sameer in controversial fashion after it was revealed that the investor paid just US$500,000 to manage the assets and the business.
Sources at Dairy Corporation, reveal that management at Uganda’s pioneer diary producer has already changed hands from Indians to Kenyans.
President Uhuru Kenyatta’s family owns a controlling stake in Brookside Dairy Limited.
Over the past ten years of operations in Uganda, SALL made significant investments into the company by introducing new equipment in milk collection, drying and distribution.
SALL claims that it invested US$ 15 million in the establishment of a milk drying plant a few years ago with capacity to handle 200,000 litres of milk daily. But others dispute the claim.
SALL also expanded its product range from just fresh milk to include other products such as, UHT milk, butter, yoghurt, milk powder, ghee and cream.
While the sale figure is yet to be known, Uganda Revenue Authority officials have started to investigate the tax accruing to government from the transaction. It is however not clear if the Indian owned company had secured a tax holiday.