Mumias Sugar chief throws in the towel as losses pile up

Wednesday May 03 2017

The cash-strapped Mumias Sugar Company is seeking to hire a new Chief Executive to take over its bumpy turnaround plan.

The troubled miller, currently shut down for maintenance, has advertised the position as Mr Errol Johnston‘s two-year renewable term comes to an end in August.

Mr Johnston, who is currently on leave, is said to have lost interest in the position despite his eligibility for another term after the board disapproved of his performance in reviving the limping miller.

The Mumias Board Chairman Kennedy Mulwa said the CEO had chosen not to seek a second term “but will serve the company in other capacities from time to time.”

“Mr Johnston has voluntarily opted for non-extension of his service as the Chief Executive Officer at Mumias Sugar Company and the board has accepted this position. The board has therefore embarked on the process of seeking a replacement in good time to allow for a smooth transition,” Mr Mulwa said in a response to our queries.

The current chief executive, who had previously headed the company from 1998 to 2001, was billed to be the turnaround artist for the country’s largest miller when he took over in August 2015.


A management transition coming shortly after a recent board overhaul and amid the transformation headwinds could disrupt the miller’s hopes of emerging from the financial troubles.

“This is just a normal transition and you should not read anything beyond it. Troubles are always there and that is why were are working to turn around Mumias,” said Moses Owino, the corporate strategy planning and communication manager.

The ideal candidate is expected to be a holder of a Bachelor’s degree in Social Sciences with some 10 years’ experience in executive management position, preferably in a manufacturing environment, as per the job advert.

Profit warning

The miller has gulped Sh2 billion from the government in bailouts without any major visible turnaround according to its financial results.

The listed firm reported a half-year net loss of Sh2.92 billion in the period to December 2016, an 87.07 per cent dip compared to Sh1.56 billion the previous year.

It has also given a profit warning with earnings expected to drop by more than 25 per cent for the year ending June 2017 from its Sh4.73 billion loss reported last year.

“Mumias Sugar Company Limited hereby announces that the projected loss for the year ending June 30, 2017 will be more than 25 per cent compared to the loss reported in the same period last year,” Mr Mulwa said in a regulatory filing in February.