Unions reject plan to axe 300 Mumias workers

Sugarcane farmers and workers' unions have rejected the decision by the Government to lay off more than 300 Mumias Sugar staff in a Sh5 billion deal with lenders aimed at reviving the ailing firm.

The cash-strapped company in recent months has pleaded with the Government for a Sh2.3 billion bailout package, to help the firm meet urgent financial needs.

In what appears to be a commitment by the Government to rescue the ailing firm, on Friday, in a meeting chaired by Deputy President William Ruto, the Government outlined a number of conditions to the firm before it releases the financial package.

Among the conditions include sending home more than 300 workers as well as disbandment of the company's board. The farmers and workers through their union leaders said sending home workers is not acceptable and may see innocent workers lose their source of livelihood.

"Why send home people who may have nothing to do with mismanagement of the company. The Government needs to rethink that decision," said Kenya Sugarcane Growers' Association (Kesga) Secretary General Richard Ogendo.

Sugar output

In recent days, Mumias, which accounts for 60 per cent of the country's sugar output, announced that its net revenue for the period ending December 1, 2014 fell by 62 per cent to Sh2.67 billion due to unscheduled out-of-crop maintenance.

Kenya Union Sugar Plantation Workers Secretary General Francis Wangara said a serious audit needs to be done to determine workers who don't add value to the company before such measures are taken.

''We will not allow any permanent employees to be replaced with casual workers or workers on contract. The send-off has to be dignified. The company has lost revenue due to outsourcing of labour and they need to work on that,'' he said.

Mr Wangara suggested that if the company is to be revived properly, appropriate thinking is needed and noted that in the past, the firm made substantial profits despite having workers on permanent employment.

Other measures suggested by the Government will involve weeding out 'sugar brokers' who have made the prices of sugar from the company competitive.

Kesga chairman Juma Ibrahim however thanked the Government, saying the package will help starving farmers get their dues and thus enable them to weed their farms on time. He challenged the Government to come up with measures to ensure the bailout package is properly utilised.

"We don't want to see a situation where the company will misuse the funds and then return to bankruptcy," he said, adding that legal action should be taken against suspected culprits who embezzled company's funds. Low sugar production, high production costs and low prices resulting from illegal sugar imports further compounded the company's half-year results. Despite the challenges, it said, the company was looking forward to better performance in the second half of the year following resumption of production.