Mumias Sugar has almost doubled its loss to Sh 4.6 billion in the 12 months to June 2015 blaming closure of factory and poor sugarcane delivered for the poor result.
Announcing its 2015 financial results, Mumias Sugar said that the loss was atop 2014’s reported loss of Sh 2.7 billion which ushered Kenya’s leading sugar miller to its deathbed.
The company’s board chairman Dan Ameyo said that delayed payments for sugarcane delivered to its factories adversely affected farmers' morale.
“The low yields reported by our farmers was caused by inadequate and erratic application of fertilisers, harvesting of premature cane resulting in poor quality canes delivery and poor cane management standards,” it said.
Mr Ameyo said that farmers’ arrears had been cleared and the company was back in business following the government’s injection of Sh1 billion. Vigilance on imported and counterfeit had helped stabilize the market, he said.
The closure of the factory for two-and-a-half months adversely affected operations and caused a heavy financial burden to the company that had to pay its employees during the period.
Lack of cash also affected its performance as essential spare parts for machines were delayed leading to haphazard stoppage of production..
“Processed sugar cane dropped by 42 per cent which saw a paltry 1.1 million tonnes processed compared to 2014’s 1.9 million tonnes. Sugar produced also fell to 70,000 tonnes compared to 170,000 tonnes processed in 2014,” the miller said.
Its fledgling electricity production investment also recorded a major fall from 14,000MW from 56,000MW in 2014 while the ethanol distillery raked in 10.3 million litres of spirit compared to 13.6 million produced in 2014.
It said its cost cutting strategy affected its production by 41.1 per cent