Mumias returns to ethanol sales 5 months later

Mumias Sugar Company #ticker:MSC will restart supplying the market with ethanol after a five-month absence, using imports of molasses from Tanzania to supplement its limited stock.

Chief executive officer Nashion Aseka says the processing started last week as the company eyes to grow its revenue by diversifying to other streams.

The company is producing 187,000 litres of ethanol. It operates only four days in a week due to shortage of sugar cane.

“We have started processing molasses and we are also in the process of shipping in more from Tanzania to supplement the little that we are getting from our plant,” said Mr Aseka.

He said the troubled firm will be importing molasses, the raw material for making alcohol, from Kagera factory in Bukoba, Tanzania. It will be shipped through Lake Victoria.

The firm suspended importation in June, citing high cost of molasses from neighbouring countries, saying the production was no longer economically viable.

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The price of molasses had shot up to Sh14,000 a tonne in July with Mumias arguing that for the business to be profitable, the cost of the raw material (that has since fallen) should be at least Sh6,000.

According to the miller’s financial statement for last year, ethanol is the only product that registered growth in revenue in six months to December 2016, having risen by four per cent to Sh453 million compared with Sh435 million during a similar period the previous year.

The company resorted to importing raw material for its lucrative ethanol plant as shortage of sugar cane hampered production.

Mumias has an ethanol plant with capacity for 120,000 litres and requires about 300 tonnes of molasses daily to operate optimally. The miller has been struggling financially in recent years, its miseries worsened by an acute shortage of raw material.