State seeks new managers for Muhoroni, Miwani sugar firms

By John Oyuke

The Government wants to overhaul the management of two ailing State-owned sugar factories in Western Kenya to improve payments to farmers.

Kenya Sugar Board is seeking a new Receiver Manager for Muhoroni and Miwani Sugar Companies ahead of their planned privatisation.

A notice from the regulatory body of the Sugar Industry said the new manager would take over from the existing receiver managers, verify current debts and facilitate timely payments to farmers and suppliers.

The two mills are currently under the official protective receivership, with Miwani having been closed down over ten years ago after being heavily indebted to suppliers, workers and sugar cane farmers in its cane growing zones.

They are also among five debt-ridden parastatal mills in the Western sugar belt, whose planned privatisation appears to have been derailed by the crowded political agenda and stringent regulatory requirements.

Ageing infrastructure

Other debt-ridden parastatal mills in the Western belt are Chemilil, Nzoia and South Nyanza Sugar companies.

The sector is slowed down by ageing infrastructure, high production costs and long maturing cane variety with low sucrose content, among other problems.

According to notice by KSB Chief Executive Officer, Ms Rosemary Mkok, the new receiver manager for the two sugar companies would retain or appoint key staff, in addition to replacing the current managers.

The manager would also develop and implement a sustainable business plan, develop and implement a sustainable factory operation and maintenance plan, and verify debts before making payments.

Muhoroni Sugar Company Limited was incorporated in 1964 as the East Africa Sugar Industries Limited, and started operations in 1966 with an initial capacity of 850 TCD (Tonne Sugar Cane crushed per day).

At the time of incorporation, majority shareholder was UKETA, a part of the Mehta Group of Companies. Later, the Government — through Agricultural Development Corporation (ADC) — acquired the majority shareholding.

The current share holding at Muhoroni Sugar Company is roughly 83 per cent Government owned and 17 per cent UKETA.

Concession

The Government also owns the run-down Miwani sugar firm, the oldest white sugar manufacturing firm on 100 per cent share equity. 

It was previously in partnership with the Vennesa, a company which is owned by the controversial Kenyan business tycoon, Ketan Somaia, but the latter made a concession and sold his shares to the Government.

 


 

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