Equipment worth Sh280m rusts away in Sony grounds

Sugarcane being transported to a factory for crushing and processing. [Standard]

Equipment worth millions of shillings imported from South Africa and India is gathering rust in the Sony Sugar Company factory yard.

Investigations by The Standard established that some of the Sh280 million equipment was to be installed in the main milling machine to revive the miller’s operations.

Other equipment wasting away include new gantry cranes and a mud-conveyor chain specially designed to use stainless steel pins and bushes to protect the mill against corrosion and wear.

This is the first time that the factory targeted to use gantry cranes to speed up the process of unloading cane. The cranes alone cost about Sh40 million while the rock remover cost Sh50 million, officials said.

Other equipment include a boiler furnace and a scroll for the screw conveyor.

As the machinery lies idle, due to lack of money to install them, factory equipment regularly breaks down and pushes up the cost of production.

Reached for comment, Sony Sugar acting Managing Director James Oluoch declined to talk about the matter. He instead referred us to the firm’s chairman Owino Likowa who confirmed that the equipment was rusting away.

"It is true that the equipment was bought two years ago and has been lying idle. I came and got them here wasting away. It is really sad to waste millions," Mr Likowa said.

Salary arrears

He continued: "We are doing badly. Employees and even the Board of Directors are owed salary arrears and accrued sitting allowances dating back five months.”

Likowa explained that the Sh280 million was part of a Sh335 million loan the company got from the Sugar Commodity Fund (SCF) to carry out annual maintenance.

The money was part of Sh757 million disbursed by the Government to finance cane development and conduct repairs and upgrades in the sugar mills.

But the money was recalled after the company used it to offset salary arrears and pay farmers part of the Sh450 million owed to them.

An audit report dated September 9, 2017 revealed that “as at the time of the audit, rehabilitation had not been done yet Sh190,642,680 was used out of Sh335 million”.

SCF Managing Trustee Nancy Cheruiyot was forced to recall the loan and the miller compelled to pay the money back to Co-operative Bank.

"Now Sony has to struggle to raise money to repay the bank, now taken as an overdraft, and which is accruing interest daily,” said Likowa.

The chairman said it was sad to see the company struggling, yet it played a major economic role in the lives of residents of Migori, Kisii and Homa Bay counties.

"Today, instead of crushing 90 tonnes an hour we do only 30 tonnes. This is not cost effective if we do a cost benefit analysis. Yet tools are down here rusting," he said.

Last week, the board's Finance Committee chairman Mwita Nyangi told the Senate Committee on Agriculture that the miller only need Sh400 million to get back on its feet.

The Njeru Ndwiga-led committee promised to address the miller's concerns.

Kenya Union of Sugarcane Plantation and Allied Workers Deputy Secretary General John Ogutu said they were planning another strike to press for their payments.

"We are laying strategies," Mr Ogutu said even as the board asked the union to be patient.