By Peter Atsiaya and Mangoa Mosota
Chemilil Sugar Company is knee-deep in debt, with losses amounting to a whopping Sh1 billion in the 2008-2009 financial year, The Standard can reveal.
The company recorded pre-tax loss of Sh959.4 million, which was a 373 per cent drop from the previous year’s loss of Sh202 million.
The chairman’s financial report on the firm, which The Standard obtained, indicates that the sugar company’s cane supply last year dropped 37 per cent, to 35,386 tonnes, from 56,165 tonnes the previous year.
The firm’s chairman, Dr Simeon Mining, attributed its sorry state to the presence of imported sugar that was being sold at lower prices, increased cost of spares, and delayed factory annual maintenance, among others.
"It is true the factory has many problems. We owe the Kenya Sugar Board almost Sh1 billion," Mining said, confirming the report.
Rampant corruption
He said there was rampant corruption at the miller, leading to the many of the problems bedeviling the factory. There are reports that the miller may have lost millions of shillings as a result of improper supply of sugar to a distributor.
Muhoroni MP, Ayiecho Olweny, said the company will collapse unless urgent measures are taken to turn it around.
"In addition to making massive losses, the company is already heavily indebted. It is building liabilities at a very fast rate, and is moving toward insolvency," said Ayiecho, in a Press statement.
