Mumias woes rise as 25,000 cane farmers drop miller

A tractor offloads sugarcane at Mumias Sugar Company. FILE PHOTO | NMG

What you need to know:

  • Mumias chief executive officer Nashion Aseka said the number of farmers dropped from about 50,000 to 25,000.
  • He said the drop in suppliers was bound to exacerbate the situation at the firm.
  • Mumias has a milling capacity of 8,000 tonnes of cane per day, but it is currently operating at less than 4,000 tonnes.

The number of farmers supplying sugarcane to Mumias Sugar Company #ticker:MSC has dropped by half as the disgruntled growers seek other alternatives due to delayed payments.

This has added pressure to the already troubled miller, which owes farmers in excess of Sh600,000, as inadequate cane supply has forced the firm to halted activities.

Mumias chief executive officer Nashion Aseka said the number of farmers dropped from about 50,000 to 25,000.

“The number of farmers has come down to currently stand at about 25,000 from 50,000 previously,” said Mr Aseka in an interview.

He said the drop in suppliers was bound to exacerbate the situation at the firm.

Mumias has a milling capacity of 8,000 tonnes of cane per day, but it is currently operating at less than 4,000 tonnes.

The factory suspended production a fortnight ago for lack of raw material, with Mr Aseka saying they were accumulating enough stocks before they resume operations.

He said that they were scouting the cane from private farmers to bridge the shortfall.

Suspension of milling at Mumias has affected earnings from other revenue streams in what is likely to sink the listed miller in further losses at the end of the financial year.

Mumias has stopped selling electricity to Kenya Power while ethanol production is now an on-and-off affair as the two activities majorly rely on cane milling.

The power production has totally been interrupted while they are procuring molasses from other factories to run the ethanol plant.

Mumias, which resumed selling of electricity to Kenya Power last year, exports about 55 per cent of its daily power output to the national grid, with the rest used to run its machines.

After-tax loss for the company in the six months to December dropped 33.22 per cent to Sh1.95 billion compared to a similar period in 2016 after expenses dipped by Sh890 million to Sh1.45 billion.

Kenya was hit by a serious shortage of sugarcane last year, affecting production of the sweetener prompting the government to open imports outside the region in order to curb the rising cost of the commodity.

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