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Chemelil Sugar owes farmers Sh186m

By Patrick Alushula | February 3rd 2016
By Patrick Alushula | February 3rd 2016

NAIROBI: Chemelil Sugar Company says it still owes cane suppliers Sh185.7 million. However, the miller moved to allay fears that it may be on the brink of collapse.

The management has clarified that the accrued arrears are for August 2014 and for the period between July 20 and November 8 last year.

However, this contradicts the position held by Gakwamba Farmers Cooperative Society, which manages the farmers' funds for the factory. Early this week, its secretary, Atyang Atyang, told The Standard that the factory did not pay farmers for their March and April 2014 supply, as well as for the months of August and December 2015.

In a statement yesterday, the company said that it has significantly reduced the debt and in fact paid out Sh70.8 million as advances to farmers. “The company is ahead of all other millers in the Nyando sugar belt in terms of cane payments, with farmers being paid for their delivery to the factory on a weekly basis,” said the company in a statement signed by its public relations officer.

The company, however, admitted that El-Nino rains that were witnessed in the region hit cane haulage and supply. The rain saw the miller record low sugarcane supply of 20,055 tonnes in November last year.

Last month, the equipment used for pushing bagasse out of the plant broke down, forcing the firm’s operations to stop for about six days. The management noted that this has since been rectified and operations are stable.

“Between November last year and January this year, sugarcane supply to the company’s factory from both nucleus and out-grower estate farms has increased by 63 per cent,” said the company.

But with the Treasury yet to implement the Sh59 billion bailout pledge given to all sugar factories and farmers pushing for their dues, there are reports that farmers had started directing their cane to other factories.

The company also dismissed reports that the miller is indebted to several statutory organisations and has outstanding power bills, terming this, “inaccurate and intended to mislead for ulterior reasons.”

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