Debt-heavy Mumias Sugar Company #ticker:MSC is set to resume milling on Sunday after after it sold scrap metal to pay part of its huge outstanding electricity bill.
The firm’s chairman Kennedy Ngumbau said the miller, which lost its electricity connection in August last year over a Sh1.2 billion bill it owes Kenya Power #ticker:KPLC, has since been reconnected.
The factory is already collecting cane from a few farmers and its nucleus plant in preparation for milling as well as running of other revenue streams such as co-generation and ethanol production, which had been paralysed by power disconnection.
“The supply of electricity is now back as we have been reconnected by Kenya Power. We are resuming milling on February 17,” said Mr Ngumbau.
The Kakamega-based miller’s woes worsened in September last year when the power utility firm disconnected electricity over outstanding bills.
The firm had to sell scrap metal for the Sh2 million paid to Kenya Power before the two parties could reach an agreement to restore power.
It is also seeking about Sh5 billion from the Treasury to, among other things, settle bills to farmers and electricity bill.
“We have been in constant negotiations with the power firm and we agreed to be paying the amount that we owe them in instalments until we clear the outstanding debt,” he said.
Mumias had earlier suffered a serious shortage of cane as disgruntled farmers lowered acreage of crop while others sold to rival millers because of delays in payment.
The firm will mainly rely on its own plantation to resume operations as they scout for more raw material from growers.
Mumias relies on sugarcane as its key raw material for the running of other revenue streams such cogeneration and ethanol production.
It resumed selling electricity to Kenya Power last year and it was exporting about 55 per cent of its daily output to the national grid before running out of raw material.
Additional reporting by Victor Raballa and Benson Amadala.