A tractor ferries cane at the Mumias Sugar Company. The miller has reportedly lost Sh1.26 billion to cane poachers. Photo/Isaac Wale
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The Agriculture committee warned Butali and Nzoia Sugar companies they could lose their operating licences if they don’t appear before it to shed light on the two issues that threaten to cripple the industry ahead of expiry of Comesa safeguards in February next year.
A public petition had been presented by farmers from Western Kenya. The two firms were given one more chance to appear.
The committee is expected to furnish the petitioners with responses and file a report to the National Assembly on measures the government is taking to revive the sector and address these challenges.
A House committee investigating reports of cane poaching and illegal importation of cheap sugar Tuesday threatened to push for cancellation of the licences of two Western Kenya millers for not appearing before it.
The Agriculture committee warned Butali and Nzoia Sugar companies they could lose their operating licences if they don’t appear before it to shed light on the two issues that threaten to cripple the industry ahead of expiry of Comesa safeguards in February next year.
“We must take stern action against these companies given the threat to the sugar sub-sector in Kenya brought about by cane poaching,” said Justice Kipsang Kemai, the Sigowet/Soin MP who chaired Tuesday’s session.
Mumias Sugar Company chief executive officer Peter Kebati told the committee the company lost Sh1.26 billion to cane poachers.
Committee members expressed their frustration with the failure by Butali and Nzoia Sugar to honour invitations to assist the committee to make recommendations on the challenges.
A public petition had been presented by farmers from Western Kenya. The two firms were given one more chance to appear.
The committee is expected to furnish the petitioners with responses and file a report to the National Assembly on measures the government is taking to revive the sector and address these challenges.
Petitioners have accused West Kenya Sugar company of perpetrating cane poaching that had caused huge loses to rivals.
Kareke Mbiuki (Maara) accused the Kenya Sugar Board (KSB) of failing in its mandate as a regulator to gazette laws governing the sugar industry since 2008.
“I think this committee should go the extra mile to ensure that KSB is reorganised to perform its mandate of regulating the sector. The industry has no regulations since amendments were made to the Sugar Act in 2008.
Mr Kebati narrated the extent of suffering by the largest miller despite having invested heavily in cane development.
“In the financial year ending June 2013, Mumias Sugar company lost a total of 150,000 tonnes to cane poaching translating to Sh1.26 billion,” he said.
Lack of adequate supply of cane, idle factory capacity, inability to meet its obligations and poor returns to investors including farmers are some of the effects the company is reeling under, Mr Kebati said.
Mr Kebati said the company paid Sh2.5 billion in taxes to the central government, Sh500 million in Sugar Development Levy and Sh200 million in improving road infrastructure in the last financial year.
“Illegal and uncoordinated imports aimed at bridging the demand deficit will cost the government revenue and cause job loses should the sector go under,” he said.
Mumias MP Benjamin Washiali questioned the why MSC opted to import 10,000 metric tonnes of sugar from South Sudan in March and a further 90,000 tonnes due to land in Kenya.
Mr Kebati said the 10,000 tonnes (not 100, 000 tonnes of sugar as alleged) was meant to bridge the possible sugar shortfall in the month of May when the factory was closed for annual maintenance. He said the sugar has not been sold in the local market.
