Mumias Sugar Company is seeking a Sh4 billion bailout to revive the factory and promote efficiency.
The firm’s managing director, Nashon Aseka, said it would take between three and four years to realise the company’s five-year turnaround strategy if the cash was made available.
“The company has the potential of making profit to boost the economy of the region and the country. We need the money to make it profitable once again,” said Aseka.
According to manager, the money should be released in tranches based on need. “We would plough Sh1.5 billion into cane development and factory maintenance and spent the rest on urgent obligations.”
OPTIMUM OPERATIONS
READ MORE
Sugar millers suffer due to cane poaching
Disputed Mumias plots were not gazetted after State acquisition
He said the management was optimistic of implementing the turnaround strategy within the stipulated time and bringing the sugar firm back to optimum operation.
Aseka said Sh9 billion owed to creditors could only be cleared if the miller begins making profits.
“We will negotiate with the banks not to auction our assets in a bid to recover debts. They should give us time to focus on revamping the factory,” he said.
In an interview with The Standard after the company’s AGM, Aseka said the Sh500 million Mumias received in July last year helped clear the arrears owed to farmers.
The company also cleared employees’ nine-month salary arrears. Aseka said the firm was on the right footing.
“When we took over, majority of contracted farmers were selling their crop to rival firms. We have talked to them about our new approach of making things work out for both of us.”
CANE FARMERS
He said they it was project that the company would start recording a turnover of Sh40 billion annually if the strategy succeeded.
“With the old machines and equipment, the factory was able to achieve a turnover of Sh25 billion. From the above projections, Sh10 billion would be the profit for the company - at least Sh15 billion would pay cane farmers,” he said.
With high turnover, he said the company would be able to pay its creditors within an agreed period.
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.”
