Ministry to write off sugar millers Sh38bn debt ahead of privatisation drive

Mwangi Kiunjuri
Agriculture Secretary Mwangi Kiunjuri. FILE PHOTO | NMG 

Agriculture Secretary Mwangi Kiunjuri says he is forming a committee to revive Mumias Sugar Company #ticker:MSC. He also announced plans to write off Sh38.5 billion in debts owed by various companies to pave way for the privatisation of the State-owned sugar millers.

The move to waive debt is one of the resolutions seeking to revive the ailing State-owned factories like Miwani, Chemilil, Nzoia, Muhoroni and Sony.

Mr Kiunjuri, who was speaking during sugar stakeholders meeting, said the public mills have been surviving on loans and this had rendered them uncompetitive.

“By the time the President ordered we pay farmers in October, Chemelil Sugar, for example, owed us Sh210 million in November which has now accumulated to Sh271 million. Nzoia too owed us Sh231 million, Mumias (Sh400 million), Sony (Sh168 million) and Muhoroni (Sh229 million).

“Muhoroni Sugar Company is requesting an injection of Sh500 million from us. Sony Sugar has also been surviving on loans. In fact, they are closing next week for maintenance which requires Sh281 million.”

It wasn’t clear for how long these debts have been in existence, but the five millers have been performing poorly for the last decade. They have run into debts and are bogged down by old machinery. They have also failed to compete with cheaper imports.

The resolution to have a special committee to look into the issues of Mumias came after political leaders questioned the validity of land ownership by the company.

Although legislators and governors from the sugarcane belt agreed to privatise the mills, the issue of land ownership remains sensitive and it needs future discussions.