Pan Paper Mills in Webuye will start production on December 15, 2016 with some 500 employees, according to President Uhuru Kenya.
The factory is expected to have doubled its production within six months, the President said during a tour of the mills.
The factory, regarded as the lifeline of Webuye, closed in 2009 leaving some 30,000 people without means of supporting themselves. Among these were direct employees and suppliers as well as youth who ferried people to and from work on boda bodas.
Tree farmers in Lugari district who supplied trees to the factory were also badly affected.
The paper manufacturer, the only one in Kenya, collapsed in the face of increasing cheap paper imports which made its operations uneconomical. High cost of electricity in the county has been blamed for high prices of Kenyan goods and it was the huge unpaid electricity bills that finally led to the closure of the company.
In 2011, the government the government of Mwai Kibaki released Shs1 billion for its revival but the plant had to shut down after only two weeks of operation and a production of only 40 tonnes of paper.