A tractor transporting cane to the factory. There are concerted efforts by stakeholders to revive Mumias Sugar Company. Photo by KNA. The collapse of Mumias Sugar Company has adversely affected the residents of Kakamega County as sugarcane farming has been their economic mainstay for a long time.
The factory was established in 1971 following the feasibility study report by the Booker Agriculture and Technical Services group that had been commissioned by the government in 1967 to carry out the exercise.
At that time the government held majority shares at 71 per cent while minority were held by the Commonwealth Development Corporation (17 per cent), Kenya Commercial Finance Company (5 per cent), Booker McConnell (4 per cent) and the East African Development Bank that had 3 per cent.
The Mumias area was at that time underdeveloped and land utilization was poor as farmers grew food crops on small areas for subsistence while the rest of the land was for grazing.
The miller’s production increased steadily hitting a climax in the 1980s and 1990s then becoming the leader in the East and Central Africa.
Its shares were listed on the Nairobi Stock Exchange in 2001 and the government shareholding reduced to 20 per cent.
However, the company’s production trajectory assumed a downward trend a few years later thanks to financial impropriety by the top managers.
According to the Chairman of the Board of Directors, Kennedy Ngumbau, the miller posted a net loss of Sh.15.1 billion in the financial year 2018/2019 against the previous year’s loss of Sh.6.8 billion.
This is happening despite the national government pumping into it more than Sh. 3.7 billion in a bailout plan.
Ngumbau said that the steep rise in the loss was driven by a 101 per cent increase in impairment charges to the firm’s plant and machinery.
The company owes the Kenya Revenue Authority Sh. 10 million while the Kenya Commercial Bank which appointed a receiver manager last month is owed Sh. 20 billion.The Kakamega County Crops Officer (CCO), Titus Omengo says the cane growing enterprise has been left to the well-to-do who have substantial portions of land. He stated that smallholder farmers have turned to food crop farming for subsistence purposes.“The emerging scenario is attributable to the fact that the large scale farmers have adequate land for cash and food crop growing as well as alternative sources of income,” he explained.The CCO added that the farmers supply the cane to the private millers, West […]