Mumias Sugar steps up regional molasses imports on biting cane shortage

Mumias Sugar Company has stepped up regional importation of molasses as shortage of cane continues to hamper production of ethanol at its factory.

The sugar miller has been importing molasses — the raw material used in ethanol production — from Uganda for over eight months now but, has now extended this to Tanzania with the first shipment of 600 tonnes expected to arrive this month through Lake Victoria.

Mumias chairman Dan Ameyo told the Business Daily the company has been forced to import molasses as a biting shortage of cane in major producing zones continues to slow down its ethanol production.

“All sugar factories are underperforming at the moment and we cannot get enough molasses, that is why we have been importing it from Uganda and now from Tanzania,” said Mr Ameyo.

The loss-making sugar miller operates an ethanol plant with the capacity to produce 120,000 litres every day.

To operate optimally, the plant requires about 300 metric tonnes of molasses daily.

The sugar miller’s latest annual report indicates that its ethanol production increased by a fifth to 12.3 million litres in the year to June compared to the 10.3 million litres produced last year. The firm earned Sh1 billion from sale of the fuel.

READ: Mumias Sugar losses up as firm blames woes on shortage of cane

An acute cane shortage has hit the country’s sugar growing regions, occasioned by reduced production by farmers and lower delivery to the mills due to decreased rainfall which has reduced yields.

As a result, Mumias Sugar’s factory now operate only twice a week after accumulating enough cane.

Mr Ameyo defended the sugar miller’s move to import molasses, saying the company will not lose money due to the policy shift.

“With the adequate molasses we are importing, our calculations have indicated that we are breaking even on cost,” he said.

Mumias had a difficult year in operations which saw some of the revenue streams closed. The water plant was discontinued with the company saying that the project was no longer viable.

The firm was also unable to sell electricity to Kenya Power due to the ongoing dispute between the miller and the electricity utility firm.

The miller’s after-tax loss for the year to June increased two per cent to Sh4.7 billion compared to the Sh4.6 billion recorded in 2015 as the cane shortage took a toll on earnings.