Sh4.1bn sinks into KMC in 13 years

Taxpayers have pumped in over Sh4.1 billion into the Kenya Meat Commission (KMC) in 13 years even as the State corporation suffered low production and swelling pending bills.

Agriculture CAS Andrew Tuimur told Senate the KMC has received Sh4.1 billion in government grants since 2006 with Sh2.3 billion of it being for development.

The cash-strapped meat processor runs on archaic machines that are manually operated, pushing up labour costs and has consistently made losses over the years.

“Since 2006, the KMC has received Sh4.1 billion in government grants, with Sh2.3 billion being development grant, Sh622 million being recurrent grant and Sh1.2 billion being offtake grant,” said Mr Taimur.

In the year to June, KMC posted a net loss of Sh228.1 million, a slight improvement from the Sh309.2 million loss made a year earlier.

The company has grappled with poor performance since the 1960s because of political interference, obsolete machinery, and loss of the European Union market due to animal diseases.

The unreliable supply of raw materials and frequent breakdowns of the plant have slowed down KMC’s efficiency making it operate at a loss.

Failure to settle payments for livestock farmers has made the suppliers deprive it of raw materials, plunging it deeper into crisis.

The plant owes farmers Sh254.4 million.

Currently, the Athi River plant slaughters 200 large stocks per week, despite it having capacity to do to do the 200 stocks per day.

The outdated machinery and equipment has also meant that the plant cannot slaughter small stocks despite available market. The initial slaughter capacity was 1,000 large stock per day and 1,500 small stock per day.

In November, Agriculture Cabinet Secretary Mwangi Kiunjuri said KMC needs Sh822 million funding to avert closure following low production and debt. Plans are under way to sell the parastatal to a private investor as the government seeks more capital to revive the ailing firm.