The story of Panpaper mills and the fall of Webuye explores the dramatic decline of Pan Paper Mills, once a vital economic engine for Webuye, Kenya.

Overview

Historical Significance: Established in 1971, Pan Paper Mills was the first major paper factory in Western Kenya, employing over 3,000 people at its peak and significantly contributing to the local economy. It was often referred to as “The engine of Western” due to its impact on the region's development.

Reasons for Decline

Financial Mismanagement: The factory faced severe financial issues, including mismanagement and misappropriation of funds. By 2009, it had accumulated debts exceeding KSh.9 billion (approximately USD 90 million) and was unable to pay its electricity bills, leading to a power cut that halted operations.

Operational Challenges: A shortage of raw materials compounded these issues. The factory relied on government-controlled plantations, but only a fraction of the allocated land was available for use.

Impact on Webuye

Economic Collapse: The closure of Pan Paper Mills in 2009 devastated Webuye, transforming it into a ghost town. Thousands lost their jobs, leading to widespread poverty and economic stagnation. Many businesses that depended on the factory's workforce also collapsed, contributing to a significant decline in local commerce.

Social Consequences: Former employees reported severe hardships, with many struggling to support their families and some even facing health crises due to stress and poverty.

Attempts at Revival

Ownership Change: In 2016, the factory was sold to Rai Group for KSh.900 million. The new owners have announced plans to invest KSh.6 billion in reviving operations and creating jobs, although progress has been slow and skepticism remains among locals about the factory's future viability.