Mu­mias Sugar seek­ing Sh2bn more in bailout

Miller asks the Trea­sury for funds a day af­ter re­sum­ing ethanol pro­duc­tion

Business Daily (Kenya) - - CORPORATE NEWS - Ben­son Amadala ba­madala@ke.na­tion­media.com MIUMIAS EAST MP

It is un­for­tu­nate that we have had in­sta­bil­ity in man­age­ment which has delayed plans to re­lease funds to the miller.”

Ail­ing Mu­mias Sugar has put out an­other re­quest to the Na­tional Trea­sury for fund­ing, a day af­ter re­sum­ing ethanol pro­duc­tion.

Board chair­man Kennedy Ngum­bau Mulwa said the firm was seek­ing Sh2 bil­lion in or­der to kick­start op­er­a­tions.

“We have put in place a vi­able plan that will put the miller back on track if the money we are ex­pect­ing from the na­tional Trea­sury is re­leased,” Mr Mulwa said yes­ter­day.

The trou­bled firm is re­ly­ing on elec­tric­ity from diesel gen­er­a­tors af­ter Kenya Power dis­con­nected sup­ply over a Sh2 bil­lion debt.

While re­quest­ing for ad­di­tional funds, the sugar com­pany said it had pre­sented a turn­around plan to the Trea­sury for ap­proval as it awaits a way for­ward on the mat­ter. “De­spite the fi­nan­cial chal­lenges we are fac­ing, the man­age­ment team has done ev­ery­thing pos­si­ble to start ethanol pro­duc­tion as we make prepa­ra­tions to re­sume milling when our po­si­tion im­proves,” Mr Mulwa told the Busi­ness Daily.

The gov­ern­ment owns a 20 per cent stake in the firm and has pre­vi­ously bailed it out to the tune of Sh3.5 bil­lion.

How­ever, the funds have led to lit­tle im­prove­ment in its earn­ings and capital po­si­tion. The firm said farm­ers had agreed to de­liver cane. Mu­mias East MP Ben­jamin Washiali said ef­forts by the man­age­ment to start ethanol pro­duc­tion should be sup­ported.

“It is un­for­tu­nate that we have had in­sta­bil­ity in the man­age­ment of the com­pany which has delayed plans to re­lease funds to the miller,” said Mr Washiali. The miller plans to pay farm­ers an out­stand­ing Sh700 mil­lion for cane de­liv­er­ies. They will be paid af­ter de­liv­er­ing cane to the fac­tory. The com­pany also said it will source cane from as far as Kisumu County, sig­nal­ing in­ten­si­fied turf wars for the raw ma­te­rial.

“In view of this, the board and man­age­ment have put in place a num­ber of ini­tia­tives to deal with fac­tory ef­fi­ciency and cane avail­abil­ity,” Mr Mulwa said.

The firm said it had ad­e­quate sup­plies of mo­lasses ob­tained from neigh­bour­ing Bu­tali and Nzoia millers to sus­tain ethanol pro­duc­tion. Ear­lier, plans to restart milling stalled af­ter trans­porters de­clined to ferry cane from farms cit­ing the high cost of fuel.

-- ISAAC WALE

PLAN Mu­mias Sugar Com­pany. BEN­JAMIN WASHIALI |

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