Corporate News
The Mumias Sugar Company. Operations are back to normal barely two days
after a cane delivery boycott temporarily interrupted crushing at the
milling firm. ISAAC WALE | NATION
By JOHN SHILITSA
In Summary
- Mumias is receiving more than 6,500 tonnes metric of tonnes against its daily production capacity of 8,000 tonnes.
Mumias Sugar Company
will go ahead with the review of its cane transportation contracts and
reserve a third of the business for farmers, giving them access to the
Sh3 billion the miller pays haulers annually.
Coutts Otolo, the company’s acting chief executive, said the
sugar miller would take away at least 30 per cent of all contracted
services to businesses within the Mumias sugar zone, focusing on farmers
in the transport business.
“Our focus is to rationalise our relationship with key players, especially cane farmers,” he said.
He said the decision to bring on board more players
into the supply chain was irreversible, since it would cushion the firm
and farmers from rising costs of production.
“Contracted transporters have agreed to honour new
terms of engagement following dialogue we had last week after they
withheld services twice,” he said.
Mumias went silent for a day last week when
transporters withdrew services, leaving it without cane to crush. Mr
Otolo said operations have returned to normal.
The miller and the haulers clashed about the decision to review the contracts in a broader plan to trim costs, he said.
Mumias is receiving more than 6,500 tonnes metric of tonnes against its daily production capacity of 8,000 tonnes.
Mr Otolo said the shift would take several months
to bear fruit, adding that the company was looking for funds to pay
farmers who are owed up to three months in arrears.
Mumias has been feeling the heat of cheap imports,
leading to losses of up to Sh1 billion. Former CEO Peter Kebati, who
lost his job early this month, was summoned to answer allegations of
illegal imports.
In its latest review, the Nairobi bourse dropped Mumias, Uchumi and Kakuzi from its benchmark 20-share index
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