Mumias Sugar has posted a Sh1.67 billion loss for the full year ending June, pulled down by a decline in cane supply and factory inefficiencies.
The company, which made Sh2 billion in profit after tax last year, said its turnover dropped 20 per cent to Sh14.9 billion due to reduced production, compounded by cheap sugar imports and an increase in global supply of the commodity.
“The global and regional sugar supply has increased resulting in much lower selling prices which further dipped turnover when coupled with low production. Cheap sugar imports also served to depress prices,” the company noted in a statement to the Nairobi Securities Exchange.
Mumias Sugar processed 1.72 billion tonnes of sugarcane, 10 per cent lower than in 2012. In the period, the company produced 147,320 tonnes of sugar, 15 per cent below the amount produced in the previous year.
The sale of power from the company's co-generation plant dropped 30 per cent Sh305 million, which it blamed on challenges in maintaining a constant flow of fuel.
It said it would henceforth leverage on the plant to earn carbon credits by registering some of its operations as Clean Development Mechanism.
"The company has already registered its cogeneration as CDM. This will earn the company revenue through carbon credits and also safeguard the environment," it said
The company also announced measures to improve production yields by setting up additional cane buying centres to facilitate collection and reduce losses from poaching of sugarcane by rival companies.
It also intends to introduce early maturing cane varieties, new fertiliser regime and remodel farmers’ delivery channels.