Can Mumias CEO pull ailing miller out of the ward? - Daily Nation

Can Mumias CEO pull ailing miller out of the ward?

Tuesday January 9 2018

Sugar cane farmers of Mumias sugar company follow proceedings at Matungu sub county headquarters in Kakamega where the managing director Nashon Aseka assured them that the company is going to pay. PHOTO | ISAAC WALE | NMG

Sugar cane farmers of Mumias sugar company follow proceedings at Matungu sub county headquarters in Kakamega where the managing director Nashon Aseka assured them that the company is going to pay. PHOTO | ISAAC WALE | NMG 

By CAROLINE WAFULA
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Can sugar expert Nashon Aseka bring back sweetness to sugarcane farmers’ lives and pull Mumias out of the red? That is the question on the lips of key players.

Six months after his appointment as chief executive, Mr Aseka is optimistic that he will thrive where his predecessors left with dismal impact. The only hitch, however, is that he needs Sh4 billion after which everything will be smooth sailing, according to him.

Mr Aseka said Mumias is able to make a Sh40 billion turnover with Sh10 billion profits annually if all systems are up and running.

“We are on the right footing. When I took over, farmers arrears stood at Sh900 million but now they stand at Sh600 million. I am projecting to clear all outstanding arrears as soon as possible,” he said.

Mr Aseka once worked at the miller as a factory manager before moving to the Agriculture and Food Authority’s Sugar Directorate.

While some experts and local leaders believe that he has the mettle to put the plant back on a recovery path and win confidence of more than 100,000 growers in the expansive sugar region, others say it will be a hard nut to crack because of the numerous challenges facing the cash-strapped once gem of western Kenya.

The miller was once the economic mainstay of Western region before fortunes turned south. So far it has received Sh3.2 billion from the government in bailouts without no major success according to its financial results.

The main challenge facing the State owned factory is lack of raw materials to crush and farmers’ arrears.

Many growers abandoned the cash crop to venture into other enterprises due to frustrations and dwindling returns.

To address the issue of cane shortage, the management has initiated outreach programmes within its growing zones to persuade growers back to their farms.

Mr Aseka who has been meeting farmers in every sub-county assured that that the factory is up and running and he needs their support to stabilise its operations.

He said the management was committed to paying farmers seven days after delivering their crop.

“We are committed to cane development that’s why the miller was projecting to acquire 350 hectares of cane from the current 100 to remain stable in its operation,” he said.

Apart from sugar, Mumias produces other things among them water, electricity and ethanol.

Mr Aseka said the factory was crushing between 4,000 and 6,000 tonnes of cane per day and had resumed the sale of electricity to the national grid at between 14 and 16 megawatts daily.

“Our power station is the biggest in Western (Kenya). We are able to produce 36 megawatts. We use 12 megawatts internally,” said the chief executive.

Put to good use

The manager with over 35 years’ experience in the sugar business says he put to good use the Sh500 million he received last year from the government.

The chief executive says the money was used to revive the miller, helped clear the arrears owed to farmers and also cleared employees’ nine month salary arrears.

Mr Aseka said he has sealed loopholes used by unscrupulous individuals at the firm to loot and misuse company resources.

Mr Dennis Okoyo, a farmer from Matungu Sub County who uprooted cane from his 10 acre piece said he is willing to grow the crop and supply to Mumias if the miller pays them on time and eliminate deductions from proceeds.

Mr Okoyo said the current leadership has shown willingness to work with farmers adding that many people depend on the income to take sustain their families.

“We will work with our new CEO to ensure the plant gets enough raw material. We don’t want our only source of livelihood to die,” he said.

To bring back the sugar firm to optimum operation, promote its efficiency and implement its five year turnaround strategy, the company is seeking a Sh4 billion bailout.

Mr Aseka said the money should be released in tranches based on need adding that the company has the potential of making profit to boost the economy of the region and the country.

“We would plough Sh1.5 billion into cane development and factory maintenance and spent the rest on urgent obligations,” he said.

Mr Aseka who has also worked with Masinde Muliro University said Sh9 billion owed to creditors could only be cleared if the miller begins making profits.

He dismissed claims that the company was repackaging cheap imported sugar as a Mumias brand.

“We have enough sugar in our warehouse. No imported sugar has been brought in and repackaged by the management,” he said.

The sugar miller’s chairman, Kenneth Ngumbau, said the factory could contribute up to 45 per cent of the region’s gross domestic product and six per cent nationally if it is made to operate efficiently.

Mr Ngumbau said the plant will conduct a financial audit to establish how a Sh3.2 billion bailout by the government was utilized.

He said the board had invited Government agencies to audit the firm’s financial systems and make the findings public adding that the probe targets former managers in the finance and procurement departments.

“We shall commission thorough investigations and audit various departments to establish how the money was spent, “he said.

Mumias East MP Benjamin Washiali and his Navakholo counterpart Emmanuel Wangwe said the government was ready to work with Mumias as long as they show their output.