Mumias denies speculations it's shutting down for good

Mumias Sugar Company. The High Court in Nairobi last year ordered that Mumias company should discontinue its operations. [Benjamin Sakwa, Standard]

Mumias Sugar Company has denied allegations that it is shutting down operations for good following court orders that found them in contempt.

The orders issued last year by the High Court in Nairobi ruled that the company should stop running, but it has been going on with operations, a thing that saw its top management fined Sh100,000 and summoned to appear in the same court on May 18.

The company has also denied allegations from some of its employees who did not wish to be named that it has "quietly asked us to stay at home until further notice."

The workers also said some of their colleagues who were residing at the company's guest house moved out, compounding fears that the company was shutting for good.

"The matter of shutting down completely is speculative. I am in Nairobi to attend court on Thursday as ordered but everything is fine at the factory just that we lack mature cane to crush," said Stephen Kihumba, the company's operations manager.

"If anything our cane development programme which takes up to a year to materialise is at its peak even as we are just ten months into operation, and we just paid farmers who supplied us sugarcane two days ago."

He said they had not shifted sugar and molasses from the company for safe keeping in private silos should the courts rule against them.

"Many of such allegations have been on since we took over the company, but I can assure you that if we gave heed to them we wouldn't be crushing cane," said Kihumba.

Kihumba argued that a company which was shutting down would not have recruited 17,000 farmers to supplement its cane production and pay farmers Sh5,500 per tonne of sugarcane which was among the highest in the market.

Last month, Justice Dorah Chepkwony found the Sarrai Group Ltd run company top managers in contempt of court for going on with operations despite being ordered otherwise.

The development led to Mumias East MP Peter Salasya calling for demonstrations that turned violent in Shianda market as he vowed to join the managers in court on Thursday.

Sarrai Group, a Uganda-based conglomerate secured a 20-year lease to run the milling section of the company excluding assets in the firm's ethanol and cogen plants, which were seized by Pan-African lender Ecobank and French development financier Proparco from KCB Group.

At its prime, Mumias was Kenya's leading sugar producer churning out more than 250,000 tonnes of sugar a year, before poor management, heavy debts, and years of mounting losses cut in on its operations.

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