Sugar firm chiefs deny crisis claims

Mumias Sugar Company has dismissed claims that a cash flow crisis has forced it to close down.

Mr Coutts Otolo, the company’s managing director, said the firm’s one-and-a-half-month shut down that began Sunday is intended to allow routine maintenance works.

He denied claims that the sugar miller had been forced to suspend operations due to a financial crisis. “There can be nothing further from truth since we have enough money to undertake the maintenance,” he told journalists on Sunday at the company. Sh1.5 billion had been set aside for the maintenance works, he said.

“We did not take a break for five months for repairs as expected, but dynamics surrounding raw material supply partly compelled us to temporarily close shop.”

He said the region’s sugarcane was far from harvesting. “Most of the crop is too young and we hope by the time we resume operations fully, there will be adequate raw materials.”

The company has been operating at 70 per cent, far below the 8,000-ton crushing capacity. The management attributed that to scarcity of the raw material.

HUGE LOSSES
According to the bosses, the firm suffered huge losses in its sugarcane development project. Mr John Imbogo, the Director of Finance, said the miller lost more than Sh1.3 million in terminated cane farms.

Before the news briefing, Mr Otolo addressed the company workers at Booker Academy, where he sought to allay fears that they planned to sack some employees.

“Workers whose services are not essential will go on leave until the company resumes operations full throttle,” he said. “We have no intention to sack anyone.”

The firm has spent Sh1 billion on settling arrears owed to growers up to June and a further Sh185 million has been set aside for July and August dues, according to Mr Otolo.

He explained that Sh200 million released to the company by the county government had been used to pay 7,805 farmers.

The sugar company bosses urged farmers to expand cane production, promising they would be paid promptly.

Contracted farmers have to wait for up to four weeks to receive payment, while non-contracted ones are paid within seven days after delivering cane.