Muhoroni Sugar Company has closed for six weeks for what the management termed lack of sugarcane to crush.
In a circular dated May 25, joint receivers Mr Fredrick Kebeney and Mr Asa Okoth said the closure has been caused by unsustainable low cane supplies over the past few months.
The circular directed all staff to proceed on six weeks paid leave until the first week of July. “In the meantime, the management shall be engaging the debenture holder to raise working capital to sustain the business on its star up,” read the circular, pinned at the entrance of the company.
The staff were shocked when the circular was pinned at the factory notice boards on a weekend.
The closure comes at a time that the factory is facing numerous woes including Kenya Revenue Authority (KRA) demand for Sh861 million arrears in taxes.
According to the authority’s records, Muhoroni Sugar owes it Sh212, 685, 482 for the income tax account, Sh387, 305, 281 for the main collection account and Sh266, 714, 169 for the sugar development levy.
KRA last week directed all firms owing the company any money to remit it directly to its tax accounts. The authority warned the firm’s creditors of punishment should they pay the miller directly.
On Friday, Muhoroni sugarcane farmers demanded the dismissal of top management even as the administration blamed hostile business environment for their woes.
While the growers of the sweetener attributed the accumulation of Sh159 million arrears dating back to April last year to neglect of the critical stakeholders, the management cited importation of cheap sugar as a major drawback to their operations.
The farmers led by Kenya Sugarcane Growers Association secretary general Richard Ogendo further called on the government to hasten the bailout process to save farmers from their current sufferings.
“We are appealing to Agriculture Cabinet Secretary Mwangi Kiunjuri to urgently visit sugar growing zones to listen to farmers and see first-hand the woes facing them,” he said after holding a meeting in Muhoroni on Thursday.
Mr Ogendo said the lives of more than 23,000 farmers drawn from Kisumu and Nandi counties have been impoverished due to lack of transparency from the current leadership.