Mumias Sugar suspends operations to conduct maintenance work

Mumias Sugar Company is suspending operations for a month to enable it fix equipment which had led to the company’s poor performance due to inconsistency in maintenance.

Outgoing managing director Coutts Otolo announced the closure, which comes barely a month after President Kenyatta toured the cash-strapped miller and gave Sh1 billion as part of a bailout strategy.

Mr Otolo said Mumias sugar brands will be off the shelves until the company resumes operations.

“We have sold all stocks produced up to yesterday and call upon consumers and all other players to bear with the situation as the sugar factory undergoes urgent maintenance,” he said.

He indicated that faulty machines at the factory were partly to blame for the problems bedevilling the publicly listed miller which accounts for over 50 per cent of sugar produced locally.

“We are certain the company will return to its profit making ways once we are done with the repairs.”

According to the MD, 8,000 sugarcane farmers accounts have been verified to facilitate clearance of debts owed to them by the firm.

“We have had suspicions that our list has ghost farmers, a situation that forced us to verify the accounts before we can make payments,” said Mr Otolo.

He said half of the Sh1 billion released to the company last month by the government will be committed to clearing these debts.

“We have Sh680 million due to farmers and plan to go out to physically verify who the genuine farmers are and later make the payments through their accounts,” he explained, adding that so far, the 8,000 farmers whose accounts have since been verified have started receiving their payments.

Turnaround

The closure also comes a week after Mr Errol Johnston was named as the miller’s new chief executive, replacing Mr Otolo who has served at the firm’s helm for a short stint.

Mr Johnston is not new at the sugar firm, having been in charge between 1998 – 2001 before handing over to current Nairobi Governor Dr Evans Kidero who left the helm three years ago.

READ: Mumias goes for its former CEO to drive turnaround

Farmers in the area have welcomed the change of guard at the company and want the new MD to address challenges surrounding development of raw materials and poor management of the sugar company.