Mumias struggles to sell ethanol as glut hits market

A section of the Mumias Sugar factory. FILE PHOTO | NMG 

By GERALD ANDAE

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Summary

• Mumias Sugar Company is stuck with alcohol estimated at Sh320 million after its traditional buyers imported the product at the time it had stopped producing.
• This comes as a setback in its efforts to recover from recent losses and financial challenges due to a prolonged period of inactivity at the factory.
• Key buyers of Mumias ethanol include London Distillers, Keroche Breweries, Kenya Wine Agencies and buyers from outside Kenya.

Mumias Sugar Company’s ethanol production is struggling to find a market with the firm holding 1.2 million litres it cannot dispose of.

The firm is stuck with alcohol estimated at Sh320 million after its traditional buyers imported the product at the time it had stopped producing.

This comes as a setback in its efforts to recover from recent losses and financial challenges due to a prolonged period of inactivity at the Western Kenya-based factory.

“Our clients say they have a lot of ethanol imports and have to finish that stock before buying ours,” said Moses Owino, the corporate affairs manager.

Key buyers of Mumias ethanol include London Distillers, Keroche Breweries, Kenya Wine Agencies and buyers from outside Kenya.

Mr Owino said Mumias will start with the local market before exporting and was working out a strategy to offload the product.
The management of Mumias was Monday holed up in a meeting to come up with a solution.

READ: Mumias Sugar net loss widens to Sh6.77bn

The miller had suspended production of alcohol for over five months after it ran short of molasses, a key raw material for ethanol production, which resumed last month.

It had a bad 2016/2017 with all its revenue from other income streams registering declines, affecting turnover which was down 67 per cent compared with the previous year.

Turnover for the year ending June 30 stood at Sh2.1 billion from Sh6 billion last year. Ethanol earned the firm Sh794 million.

Mumias said it will focus on sugar and ethanol as main income earners with plans underway to resume water bottling plant stopped in 2015.

READ: Mumias returns to ethanol sales 5 months later