A section of the Mumias Sugar Factory. FILE PHOTO | NMG
Mumias Sugar Company has introduced a stringent cost-cutting regime as it tries to weave its way out of financial straits.
The
measures include slashing fuel allowances for management officials by
half in a move that would see the miller save up to Sh27 million a
month.
A source not authorised to speak for the miller
told the Sunday Nation workers will now have to foot water and
electricity bills as part of the plan while the company is understood to
be finalising details of a staff retrenchment plan affecting employees
who have attained 65 years.
The factory temporarily
halted operations last month due to cane shortage, but has continued
producing ethanol for sale in the local market after demand for the
product reportedly improved.
Mumias chief executive
Nashon Aseka told the Sunday Nation that the management of the firm is
finalising details of a turnaround plan, which will be submitted to the
Treasury.
He, however, declined to delve into the
details. “We will make the details public at the appropriate time. There
are still consultations in progress and it will not be appropriate for
me to discuss them at this stage,” said Mr Aseka.
At the same time, the rains pounding most of the country have further stalled Mumias’ plan of restarting milling.
The miller now says its cane transporters are finding it difficult to move the raw material from waterlogged farms.
“We
are still planning how to restart milling. We are actually in the
season when factories shut for maintenance, but we hope to start
crushing when the weather improves to ensure there is no disruption in
cane supply.”
Sugar millers in the region, however,
continue to grapple with shortage of cane which has persisted since the
beginning of the year due to the prolonged dry spell which affected
production.
Earlier, Mr Aseka had said the miller was
seeking an additional Sh5 billion to kick-start operations to avoid
running into another round of financial hiccups and disruptions, which
have plagued the firm for the past few years.
Despite
the government releasing Sh3.5 billion as bailout, the miller has
continued struggling with debts including delayed payment for cane
delivered by farmers amounting to more than Sh600 million.
Mr
Aseka has maintained that they are doing their best to restore the
confidence of farmers and other stakeholders in the miller.
Mumias
and the Kakamega County government have agreed to set up a joint
technical committee to address issues related to production.
Mr
Aseka said no major decision was made during the meeting between
Governor Wycliffe Oparanya and the management of Mumias, but the
committee is expected to start work this week.
The
county government is understood to be keen to provide funding to support
agricultural extension services to farmers including ploughing,
provision of fertiliser and seed.
Last month Deputy President William Ruto said the management of Mumias had been told to develop a turnaround plan.
Other
millers in the region, including the privately-run West Kenya Sugar and
Butali Sugar Mills are also grappling with a shortage of cane,
triggering a vicious competition for raw materials.
West
Kenya general manager for Agriculture, Mr Ramar Sangaiah, said the
devastation caused by the rains had disrupted harvesting and
transportation of cane from the fields.
But he said
West Kenya is still operating with the available cane. He said the rains
had washed away roads leading to sugarcane farms, disrupting transport
services.
“The good news is that next year we are
hoping to have improving cane supply because of the heavy rainfall this
year. We have intensified planting of cane to ensure adequate supply to
sustain operations,” he said.
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