Government pays Sh229m to Pan Paper staff 16 years after layoffs
Western
By
Jackline Inyanji
| Nov 25, 2025
The National Treasury has released Sh229 million in salary arrears owed to former workers of Webuye-based Pan African Paper Mills.
Trade and Industrialisation Principal Secretary Juma Mukhwana said the payment was a show of commitment by the government to revive the factory.
The former employees were paid Sh75 million in 2018 as an ex-gratia payment based on their three months’ salary net of tax.
“The payout represents long-awaited justice and rekindles hope that Webuye Town’s industrial heartbeat is returning,” Mukhwana noted.
Speaking after handing over the cheque in Webuye, the PS said those to be paid are 1,349 ex-employees of Pan Paper who were laid off 16 years ago.
READ MORE
MPs pledge site visist as KTDA gives progress on hydro power project
Why Gen Zs are not sending money to parents
The true impact of Iran-US war on the Kenyan economy
KPA steps up plans for expansion of Kisumu Port
Infrastructure, trust key to cities success as Nairobi, Rome stagnate
HF Group posts 40pc jump in full-year net profit to Sh1.4 billion
How personalised developments are reshaping local property market
Government tightens oversight on Saccos to safeguard members' deposits
President were National Assembly Speaker Moses Wetang’ula, Bungoma Governor Kenneth Lusaka and Senator David Wakoli.
Others were Webuye East MP Martin Pepela and Women Rep Catherine Wambilianga.
Wetang’ula said it was a relief to families whose livelihoods had been disrupted for years following the collapse of the firm after decades of financial turbulence.
“Since its inception in 1973, Pan Paper transformed the lives of many people across the country and spurred the growth of Webuye town.
Wetang’ula expressed regret over the factory’s financial troubles that ultimately led to its shutdown, stripping thousands of families of stable income. He credited investor Narendra Raval, alias Rai, for stepping in to revive the plant.
“I thank Rai for reviving this company because he is the number one investor in Bungoma County,” Wetang’ula said.
He added that the lifting of a ban on logging was expected to accelerate the factory’s return to full operations. “Soon, you will see Rai Paper back on its feet,” he told workers.
Governor Kenneth Lusaka lauded the disbursement, calling it a moment of pride for the county.
“I am proud to witness this happening and to see our workers finally being paid,” he said.
Investor Jaswant Rai welcomed the payouts and said the company would continue integrating former employees into its revived operations.
“Among the ex-employees, I will take one family member from each family. One employee from each household will get an opportunity. I am committed to restoring stability across Kenya’s agro-industrial value chains,” Rai noted.
Patrick Mayabi, chairman of the former Pan Paper workers, thanked the government, noting that the process took long, but finally, it is a sigh of relief.