Societies row over coffee mill’s ownership

By JOSEPH MUCHIRI

Embu,Kenya:A disagreement on shareholding of the proposed, multi-million coffee mill for Embu County may derail its take off, a co-operative official has said.

It has emerged some of the 24 coffee co-operative societies in the county are uncomfortable that Murue, the pioneer co-operative society, wants to control 60 per cent shares in the new mill.

County Director of Co-operatives David Muriuki yesterday revealed during a recent meeting, all co-operative societies had agreed that milling their coffee in the county was a viable idea.

“However, the other societies are opposed to the parent society, Murue, holding 60 per cent shares in the first county-owned coffee mill. Murue has argued since it came up with the idea, contributed its own money and gave land and buildings, it should have the lions’ share,” said Muriuki.

Muriuki pointed out the Co-operative Act stipulates that no society should own more than 20 per cent shares in such an entity, unless they transform it into a company.

“Running the mill as a co-operative is more beneficial than as a company because they can get funding from the county government. But should Murue decide to go on its own, the operating costs might be high because it requires professional managers to run it,” he added.

The director said a section of the Coffee and Co-operatives Act gives leeway to the management committee of a co-operative society to choose their miller, hence, some might decide to take their coffee elsewhere.

corrupt dealings

He said the mill may operate below capacity, unless the legislation is changed to recommend that all coffee produced in Embu should go through the county miller.

The mill has a capacity to process two tonnes of coffee beans per hour.

In 2012, Embu produced six million kilogrammes of coffee cherries, which was sold at Sh650 million. It is estimated that transport and milling cost accounted for 15 per cent of the amount earned per kilogramme of coffee sold and this cost might therefore reduce when the coffee is milled locally. “About 60 per cent of coffee from Embu is lost in processing, mainly because of corruption in commercial mills,” said Muriuki.

Construction of the mill at Kavutiri in Embu North district is 90 per cent complete.

Murue chairman John Muriuki said the issue of shareholding is still being deliberated by the chairpersons of the various co-operative societies. “We are still deliberating on when we will start milling and shareholding,” he said adding Murue had proposed to get 60 per cent shares since they own most of the property.