Work cut out for new Mumias sugar CEO

The incoming Mumias Sugar Company managing director, Mr Peter Kebati, takes over the miller at a time when the sugar sector is experiencing turbulence.

Stakeholders will be watching to see how he navigates the high tides to see the largest sugar producer in the country remain profitable.

Mr Kebati, a career accountant, is expected to steer the giant sugar miller through stiff competition from cheap Comesa imports when the current safeguard window expires.

The new MD will also have to deal with challenge of sugar cane shortage that has seen many millers without a nucleus supply poach from established companies.
Farmers are also abandoning cane growing, instead choosing other crops that mature within a relatively shorter period and fetch more returns.

“I am determined to tackle and find a permanent solution to the thorny issue of sugar cane development to increase and maintain sufficient annual supplies to the company,” said the chief executive.

The new managing director will also have to deal with fluctuating sugar prices and occasional shortages that are caused by middlemen out to increase prices.
Mr Kebati takes over the reins of power from Dr Evans Kidero, whose contract ends on July 1. He has expressed an interest in elective politics and said he would vie for the seat of Nairobi County governor.

Dr Kidero was the first Kenyan to take over the management of the firm as chief executive eight years ago.

His appointment followed the expiry of a management contract of the British firm, Booker Tate, with the government, which then was the largest shareholder in MSC, then a parastatal.

Mumias has invested Sh2.5 billion in sugar cane development to over 104,000 farmers in its out grower sector, who are contracted to plant raw material for the company.

As the company’s finance director, Mr Kebati had set his sights on increasing the tonnage of sugar the company is expected to produce annually to feed the country’s perpetually hungry market for the commodity.

“Mumias is the only sugar-producing company in Eastern Africa that uses the ultra modern diffuser technology as opposed to rolling mills,” said Mr Kebati.

He said completion of ongoing diversification projects are his top priority.

Mumias pulled a first among sugar producers in the country when it started generating its own electricity to become self-sufficient in power supply as well as sell to the national grid.

Mr Kebati wants to see the successful installation of a water bottling plant, another initiative to diversify products and increase revenue streams.

“The Sh436 million water bottling plant will start operations this month, while the Sh4 billion ethanol production facility is set to begin operations on 1 June. The two projects are expected to boost the company’s annual revenues,” he says.

Mr Kebati says his main focus is to consolidate the gains from the sugar business and complete the diversification into new business lines.

“We estimate that net revenues from water and ethanol will contribute five per cent and 10 per cent of total annual revenue respectively in coming years,” he added.

The CEO said Mumias embarked on its business diversification plan in 2009 with the generation of electricity.