A section of the Mumias Sugar factory. FILE PHOTO | NMG
Summary
- Part of the plan in place by the miller is to pay farmers the outstanding Sh700 million for cane deliveries after resuming operations.
- Thereafter, farmers will be paid after delivering their cane to the factory.
- The company also says it will fetch as far as Kisumu county for cane, signalling another battle for raw material
Ailing Mumias Sugar Company has sent out yet
another plea to the National Treasury for funding, even as it says it
will seek more cane from other areas to sustain operations.
The
company’s senior management and the board met on Tuesday and resolved
that the Sh2 billion they have requested from the National Treasury will
be key in restarting the firm’s operations.
Part of
the plan in place by the miller is to pay farmers the outstanding Sh700
million for cane deliveries after resuming operations.
Thereafter, farmers will be paid after delivering their cane to the factory.
But the company also says it will fetch as far as Kisumu county
for cane, signalling another battle for raw material, whose shortage has
crippled State-owned millers.
“In view of this, the
Board and Management have put in place a number of initiatives to deal
primarily with two issues, touching on factory efficiency and cane
availability,” Mumias Board Chairman Kennedy Ngumbau Mulwa said in a
statement last evening.
The chairman spoke after
meeting with senior management officials at the factory in Mumias on
Tuesday to discuss final preparations and assess availability of cane
before resuming milling.
The team of directors and
senior management officials later visited some farms in Koru and
Muhoroni in Kisumu, in what they said was to map out areas of possible
cane supplies, which will be a key input for its turnaround plan.
But all these will depend on disbursement of funds from the National Treasury.
Met 80pc of conditions
“We
have so far managed to fulfil 80 per cent of the conditions set in
place by the government and the good news is that the restructuring plan
has been approved.
"We expect the national treasury to release the funds anytime to enable us restart normal operations,” said Mr Mulwa.
Mr
Mulwa was upbeat about the progress of made by the management to
implement the restructuring plan for the revival of the miller.
Officials met to discuss challenges associated with shortage of cane and sustainability of economical factory operations.
“During
the recently concluded high level consultations for Sugar Development
on June 28-29th,2018 between officials of the national government and
those from County Government of Kakamega, one of the resolutions made
was for the National Government and the County Government of Kakamega to
assist in the turnaround of the Company.
“In the next
two days, the team plans to visit other farms in Kitale and Siaya. The
visits so far have been a great experience with emerging possibility of
forging partnerships to support the company’s revival plan,” said Mr
Mulwa.
The proposed changes include sealing of
loopholes to ensure funds released to the miller are not diverted to
other use by management officials.
“We want to work
closely with farmers by ensuring they are paid for cane as soon as they
deliver it to the factory to win back their confidence,” said Mr Mulwa.
Halted operations
The miller halted operations four months ago due to a shortage of cane.
The
government asked the miller to restructure operations and reduce its
employees from 1,400 to 700 workers before additional funds could be
released.
The management was working with local leaders and farmers to finalise preparations on the 20 per cent of the restructuring plan.
Last week, Mr Mulwa said the company had approached farmers from outside Kakamega for additional supply of cane.
“We
are having a board meeting to discuss a range of issues and top on our
agenda is the plan to restart milling at the factory. We are upbeat
everything is proceeding according to plan,” he said.
Mumias
Sugar is looking for an additional Sh1 billion Treasury bailout to pay
farmers and clear other outstanding debts. The miller owes cane farmers
an estimated Sh700 million.
“The supply of mature cane
could last for close to six months as the miller engages farmers to
improve cane development in the miller’s catchment,” said Mr Ngumbau.
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