Mumias Sugar resumes ethanol production after deal with KRA

Mumias Sugar factory. [David Gichuru/Standard]

Struggling Mumias Sugar Company is set to resume ethanol production after striking a deal with the taxman.

The Kenya Revenue Authority had last month stopped the miller from selling ethanol produced at the factory, demanding that it deposits Sh100 million bond.

Kakamega Governor Wycliffe Oparanya said KCB Bank, which last year put the debt-ridden miller under receivership – has guaranteed Sh10 million.

Ethanol is key in generating revenue to sustain the miller since it is being used to manufacture alcohol-based hand sanitisers.

“We are now at the moment free to start the operations immediately some ethanol had been produced but could not be sold,” Oparanya said.He is spearheading the revival of Mumias – working with receiver-manager Ponangipalli Rao who had hired 350 people for ethanol production.

Oparanya was confident that Mumias would take about Sh1 billion to return to profitability. “It has been difficult to get spares from overseas but there was a consignment from South Africa,” he said. He said they are working on the 10,000 nucleus estate to plant cane. “We have already ploughed 2,500 acres with seed cane and intend to have the entire 10,000 acres planted,” said Oparanya.