Mumias Sugar Company has temporarily stopped crushing of cane due to shortage of raw material.
However, Chief Executive Officer Nashon Aseka on Monday said only the factory's sugar production line has been affected but other operations such as ethanol production and agricultural services are still running.
"We have been forced to temporarily shutdown operations because it is no longer economically viable to continue crushing with limited supply of cane," Mr Aseka said.
The miller has for the last six months been struggling to sustain its operations.
For example, the firm lacks sufficient funds to pay farmers, with outstanding arrears amounting to more than Sh600 million.
Other millers from the region are also grappling with cane shortage, triggering a vicious competition for raw material.
Mumia Company has been taking up to two weeks to collect 6,000 tonnes of cane for crushing, but the supply dwindled.
"We need to have 4,000 tonnes of cane per day, at least three times a week, to be able to operate optimally and for our operations to be economical," he added.
Mr Aseka blamed rival millers (West Kenya Sugar Company in Kakamega County and Kibos Sugar in Kisumu County) for poaching cane from contracted farmers, which he said has been encouraged by feeble regulations to deal with "errant players in the industry".
He urged the Sugar Directorate to develop regulations that will discourage cane poaching.
"We are finding it difficult to continue investing in cane development and then end up making huge losses after rival millers harvest the cane."