THE government's plans to re-open Pan Paper Mills have hit a snag due to lack of more than Sh2 billion required to pay debts and carry out more repairs. The

Ministry of Industrialisation, however, says the paper firm will not be allowed to collapse. PS Karanja Kibicho has written to the Cabinet over the status of the Webuye based firm and the need to revive it.

The company had started operations early this year but stopped due to heavy debts incurred over the years. Suppliers of material and services have been demanding to be paid the debts for a long time. There has been a tag of war over the control of the firm as receivers sent by the debtors threatened to take over assets of the troubled company because of the unpaid bills.

The firm's 800 workers were sent home and they fear their jobs may be lost because of problems at the paper company. "We cannot allow the firm to continue operating without the money. We are demanding to be paid in full," one of the receivers said. Pan Paper which was East Africa's largest paper manufacturing firm is valued at more than Sh20 billion and it went under last February due to heavy debts amounting to more than Sh1.5 billion.