Mumias Sugar to retrench 900 employees as CEO suspended

The ailing Mumias Sugar Company is set to fire 900 workers next month in a fresh round of reorganisation that has also seen its Chief Executive Patrick Chebosi sent home on compulsory leave.

The miller has more than 1,500 workers and will trim the excess at a cost of Sh400 million as it moves to tame its bloated wage bill estimated at Sh40 million a month.

The company’s board chairman Kennedy Ngumbau yesterday confirmed the planned reorganisation and Mr Chebosi’s suspension.

SEE ALSO :Mumias to sell non-core assets in recovery plan

He, however, did not give details on the CEO’s interdiction, coming barely seven months after his appointment to steady the ship that is almost sinking from years of financial mismanagement and mounting debt.

Taking over

He said Isaac Sheunda, a former chief security officer at the firm, would take over the hot seat in an acting capacity.

“The appointment is aimed at improving service delivery at the miller.

“There shall be a complete overhaul in the management structure of Mumias Sugar so that it can be able to restore the company back to its crushing capacity,” Dr Ngumbau told The Standard.

SEE ALSO :Lawyer wants miller wound up over debt

The corner office at the sugar miller has been dogged by controversy and has become a revolving door for its occupants. Chebosi took over from Nashon Aseka in June last year.

Mr Aseka had succeeded Errol Johnson, who fled the country citing threats to his life in June 2017.

The miller owes farmers about Sh700 million in unpaid cane deliveries. It also owes suppliers and lenders an estimated Sh20 billion.

The firm has had to contend with increased competition from new entrant Busia Sugar Company and other private millers in the region that have heightened cane poaching, drastically reducing Mumias’ and other public-owned millers’ milling capacity.

The miller has delayed publishing its financial results by almost four months and has even opted to sell off Sh10 million worth of scrap metal and timber from its forest plantation to resume its operations.

SEE ALSO :Mumias Sugar board denies plot to sell company assets

Mumias, which has lost the area under cane, as dejected farmers turn to other crops, can barely collect enough cane and last year resorted to milling immature and stale cane due to the time it took to accumulate enough of the raw material to feed the industry.

Pay arrears

More than 76,000 farmers are said to have uprooted their cane and ventured into other businesses, with only 20,000 in the region currently engaging in cane farming.

Dr Ngumbau said he was hopeful they would resume milling next month. He said they had contracted private farmers to sustain the capacity for six months before its cane could mature.

“My focus will be to restart the factory by February this year. We want to start crushing, which is our core business,” he said.

SEE ALSO :Church leaders link Matungu killings to Mumias company collapse

Mr Sheunda said he would prioritise payment of farmers’ arrears.

“Farmers payments will be a top priority for me. Other employees will be getting their pay after farmers have been paid,” he said.

He said he would also meet farmers to agree on how they could resume cane supply.

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