Mumias Sugar Company wants the government to add some Sh.2 billion for them to be in a position to operate as it used to before its woes started in 2014.
The company seems to be breaking down as time goes by even after the government gave out Sh.1 billion last out for bailout, it is still struggling to operate. The company registered Sh.1.58 billion tax loss from June to December last year, which was even higher than the losses experienced on the same period in the year 2014 of Sh.1.45 billion.
The company has not been in a position to generate power export revenue since 2014 as it has not been having exports to that national grid. It has not been in apposition to sell any electricity to Kenya Power, thus recording zero revenues from that sector.
The Company’s Chairman, Dan Ameyo said that the only way out was for the government to join hands with the company so as to helping reviving the sugar miller.
Last year, President Uhuru Kenyatta gave out Sh.1 billion bailout to the company, thus this will be the second bail out that they are seeking for from the government. The amount that was given to them was to be uses for paying farmers debts and replacing machines that had broken down.
The sugar miller is trying hard to battle out how to pay the many debts that it has, that add up to Sh.10.2 billion. By the end of last year, the company had high negative cash flows, among other challenges like lack of maintenance, shortage of raw materials and slow developments of projects.
Mumias Sugar’s woes kept being challenged by the new sugar millers that were established in the region, with better facilities thus bringing about very stiff competition to them. This therefore forced farmers to seek alternative ways of getting profits for their produce thus moved to selling their sugarcane to the new millers.
Article by Vera Shawiza.