Mumias Sugar has slashed fuel allowances for managers by half in move that will see it save Sh27 million in a month.
Workers will now have to foot water and electricity bills as part of the plan while the company is understood to be finalising details of a staff retrenchment plan affecting employees who have attained 65 years.
Mumias chief executive Nashon Aseka told the Sunday Nation that the management of the firm is finalising details of a turnaround plan, which will be submitted to the Treasury.
Mumias Sugar Company #ticker:MSC has introduced a stringent cost-cutting regime as it tries to weave its way out of financial straits.
The measures include slashing fuel allowances for management officials by half in a move that would see the miller save up to Sh27 million a month.
A source not authorised to speak for the miller told the Sunday Nation workers will now have to foot water and electricity bills as part of the plan while the company is understood to be finalising details of a staff retrenchment plan affecting employees who have attained 65 years.
The factory temporarily halted operations last month due to cane shortage, but has continued producing ethanol for sale in the local market after demand for the product reportedly improved.
Mumias chief executive Nashon Aseka told the Sunday Nation that the management of the firm is finalising details of a turnaround plan, which will be submitted to the Treasury.
He, however, declined to delve into the details. “We will make the details public at the appropriate time. There are still consultations in progress and it will not be appropriate for me to discuss them at this stage,” said Mr Aseka.
At the same time, the rains pounding most of the country have further stalled Mumias’ plan of restarting milling.
The miller now says its cane transporters are finding it difficult to move the raw material from waterlogged farms.
“We are still planning how to restart milling. We are actually in the season when factories shut for maintenance, but we hope to start crushing when the weather improves to ensure there is no disruption in cane supply.”
Sugar millers in the region, however, continue to grapple with shortage of cane which has persisted since the beginning of the year due to the prolonged dry spell which affected production.
Earlier, Mr Aseka had said the miller was seeking an additional Sh5 billion to kick-start operations to avoid running into another round of financial hiccups and disruptions, which have plagued the firm for the past few years.
Despite the government releasing Sh3.5 billion as bailout, the miller has continued struggling with debts including delayed payment for cane delivered by farmers amounting to more than Sh600 million.
Mr Aseka has maintained that they are doing their best to restore the confidence of farmers and other stakeholders in the miller.
Mumias and the Kakamega County government have agreed to set up a joint technical committee to address issues related to production.
Mr Aseka said no major decision was made during the meeting between Governor Wycliffe Oparanya and the management of Mumias, but the committee is expected to start work this week.
The county government is understood to be keen to provide funding to support agricultural extension services to farmers including ploughing, provision of fertiliser and seed.
Last month Deputy President William Ruto said the management of Mumias had been told to develop a turnaround plan.
Other millers in the region, including the privately-run West Kenya Sugar and Butali Sugar Mills are also grappling with a shortage of cane, triggering a vicious competition for raw materials.
West Kenya general manager for Agriculture, Mr Ramar Sangaiah, said the devastation caused by the rains had disrupted harvesting and transportation of cane from the fields.
But he said West Kenya is still operating with the available cane. He said the rains had washed away roads leading to sugarcane farms, disrupting transport services.
“The good news is that next year we are hoping to have improving cane supply because of the heavy rainfall this year. We have intensified planting of cane to ensure adequate supply to sustain operations,” he said.
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