KENYA: Only sugar production impacted by lack of cane availability
Published: 04/02/2018, 11:56:10 AM
Mumias Sugar Company has temporarily stopped crushing of cane due to shortage of raw material, according to Kenya's Business Daily Africa.
The company's Chief Executive Officer Nashon Aseka on Monday said only the sugar production line at the factory had been affected but other operations including; ethanol production and agricultural services were still on.
The miller has for the last six months been struggling to sustain operations amid a biting shortage of raw material in its catchment area.
Other millers from the region are grappling with a similar shortage of cane triggering vicious competition for raw material in the sugar zone.
The crisis at the Mumias factory has been worsened by lack of funds to pay farmers' outstanding arrears amounting to more than KES600 million (US$5.96 million).
"We have been forced to temporarily shut down operations because it is no longer economically viable to continue crushing with a limited supply of cane," said Aseka.
The miller has been taking up to two weeks to collect 6,000 tonnes of cane for crushing but the supply has recently dwindled further affecting milling of sugar.
"We need to have 4,000 tonnes of cane daily at least three times a week to be able to operate optimally and for our operations to be economical," said Aseka.
The entry of rival millers has complicated matters as the scramble for raw material intensifies.
Aseka blamed rival millers for poaching cane from contracted farmers due to lack of proper regulations to deal with "errant" players in the industry.
"The biggest challenge we are still facing is lack of funds to pay farmers for cane delivered.
The rival millers have taken advantage and harvesting cane from our contracted farmers with promises of paying them within days of delivery," said Aseka.
Mumias Sugar management has asked the Sugar Directorate to come up with regulations to punish millers violating the law by engaging in cane poaching in the region.
"We are finding it difficult to continue investing in cane development and then end up making huge losses after rival millers harvest the cane," said Aseka.