Mumias Sugar Company will close down its non-core businesses as it seeks to reduce its debt burden and get back to profitability.
The miller, which expects to reopen in January, has been producing electricity, distilled water, ethanol and molasses besides its primary cane crushing operations.
Board Chairman Kennedy Ngumbau said the firm had made losses because of running different business entities.
“We have been producing bottled water for the last five years but the venture has not been yielding the desired results. We will no longer produce Mumias Sprinkles water but will now focus on cane crushing,” he said in Kakamega yesterday.
“We will concentrate on cane development, paying farmers on time and crushing, nothing else.”
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Shifted focus
Dr Ngumbau said the management had now shifted its focus to cost-cutting to get the company back on its feet.
He said cane farmers been suffering waiting for their payments, which have not been forthcoming. He added that all dues owed would be settled next month.
The company is auditing its accounts to end cases of ‘ghost’ farmers being paid for no cane deliveries, according to the chairman.
“The auditing process of genuine farmers is almost complete and mid-December we are optimistic we will have paid farmers their money. The future of cane farming is bright and we encourage farmers to stop uprooting their cane but plant more,” Ngumbau said.
Mumias has been struggling financially and this has been attributed to past managerial problems, cane poaching and cheap imported sugar in the market.
Ngumbau, who is also a member of the sugar sector task force committee, said he was confident the team would make good recommendations to address the challenges facing the sector. The committee is chaired by Agriculture Cabinet Secretary Mwangi Kiunjuri and Kakamega Governor Wycliffe Oparanya.
“Cane poaching has been a major challenge to the survival of State-owned sugar companies. The task force has confirmed that cane poaching has been a menace that should come to an end,” said Ngumbau.
He explained that the poaching had caused millers such as Mumias to incur huge losses as their contracted farmers sell cane to their competitors.
“Cane poaching contributed to the near collapse of Mumias. Farmers opt to sell their cane to rival millers, yet we had invested in their cane,” said Ngumbau, adding that Mumias would rely on cane from its nuclear estate.
