Mumias Sugar gets Sh500m bailout ahead of Uhuru visit

A worker at the Mumias factory. It is estimated the miller needs Sh10bn to go into full production capacity. FILE PHOTO | NMG
A worker at the Mumias factory. It is estimated the miller needs Sh10bn to go into full production capacity. FILE PHOTO | NMG 

Cash-stapped Mumias Sugar Company #ticker:MSC is set to get Sh500 million from the National Treasury after MPs approved the bailout in the recently passed supplementary budget estimates.

National Assembly ad-hoc committee for supplementary budget member Bernard Shinali said the amount was factored in to boost the revival plan for the sugar miller.

Speaking in Mumias town when he hosted Jubilee defectors from Matungu, the Ikolomani MP said the  money was an addition to the initial Sh500 million already channeled to the firm in a bid to revive it.

“The money is part of commitment to finance Mumias Sugar Company, which we factored in the budget to meet the government obligation to bail out the ailing miller. President Uhuru Kenyatta will soon be visiting the company to deliver the cheque,” said Mr Shinali.

Mumias, which at its peak controlled two thirds of Kenyan sugar market ran into trouble after amassing debts on poor management and being unable to cope with competition from cheaper imports. It required about Sh3 billion to get back to operations.

Mr Shinali said lawmakers from Western region in both the National Assembly and the Senate assemblies were united in the push to return Mumias Sugar to profitability.

Matungu MP Justus Murunga argued that Mumias requires over Sh10 billion to resume full throttle operations and regain its lost glory.

“Let the Jubilee government release the money in two phases to the sugar miller if it means well for Mumias cane farmers,” said Mr Murunga.

He added that Parliament had last week passed a bill to have cane farmers paid their dues within two weeks after delivering cane to the millers.

He said he was drafting a motion to force the national government to surrender a fraction of the 20 per cent shareholding in Mumias to Kakamega County so that the devolved unit can have a say in running of the firm.

“My intention is to have the two levels of government manage the sugar firm. Let the county government be mandated with cane development while the national government handles policy issues in the company,” said Mr Murunga.

Mumias East MP Benjamin Washiali said the government had connected the sugar miller to the national power grid.