Mumias eyes cost-cutting to reverse Sh1.6bn loss

Mumias Sugar Company is turning to cost-cutting in a bid to reverse the Sh1.6 billion net loss it posted in the year ended June.

Chief executive officer Peter Kebati said the miller will undertake a number of measures to reduce its costs that may include a further cut on cane prices.

“Ways of reducing costs are being explored,” Mr Kebati said in an e-mail response to the Business Daily.

“We shall monitor the cane price in line with the sugar prices before making any adjustments.”

Mumias recently reduced the price at which it is buying cane from Sh3,825 per tonne to Sh3,385. Its rivals have also reduced their prices by between 11.5 per cent and 27 per cent in what is seen as signal of increased cane supply.


West Kenya and Butali are currently paying Sh2,700 per tonne of cane deliveries, down from the previous Sh3,700.

Mumias’ loss has been linked to high operation costs and reduced sugar production brought by increased competition for cane among sugar millers.

READ: Mumias Sugar posts Sh1.67bn loss

Its sales dropped 20 per cent to Sh14.9 billion in the year ended June, with the firm further suffering from cheap sugar imports.

Mumias Sugar processed 1.72 billion tonnes of sugarcane, 10 per cent lower than in 2012.

Its share price at the Nairobi Securities Exchange has dropped 25 per cent over the past six months to trade at Sh3.35.