Nzoia Sugar gets Sh500m as state out to revive debt-ridden millers


Nzoia Sugarcane farmers sing and dance when Agriculture, Livestock, Fisheries and Cooperatives Cabinet Secretary Hon Peter Munya, Defense CS Eugene Wamalwa handed over dummy cheque of 500 Million Shillings to Nzoia Sugar company management on November 8, 2021. [Benjamin Sakwa, Standard]

The national government has released Sh500 million to Nzoia Sugar Company in its efforts to revive the miller.

The money is part of the Sh1.5 billion the National Treasury set aside to bail out State-owned sugar companies in Western Kenya.

Agriculture Cabinet Secretary Peter Munya, who handed the cheque to the company on Monday, said the money will go towards paying farmers, workers, and servicing machines at the factory.

“The money will kick-start operations of the miller and boost the morale of the employees and farmers,” said Munya at the company’s offices in Kanduyi Constituency, Bungoma.

“At least Sh200 million will go towards servicing the machines and carry out some repairs at the factory to increase its grinding efficiency. At the moment, the factory produces one tonne of sugar from 15 tonnes of sugar cane crushed. This should not be the case. In an ideal situation, the miller should make a tonne of sugar from 9-10 tonnes of sugarcane crushed,” said the CS.

Another Sh200 million will be used to pay farmers while Sh100 million will go towards the salaries of the company’s 700-odd employees. The last time the workers were paid was in April last year.

The firm owes farmers Sh743 million while transporters are owed Sh182.4 million. Cane harvesters have been demanding Sh71.3 million.

Nzoia Sugar owes Nzoia Out Growers Company (NOCO) is owed Sh4.8 million. Unpaid cess to the county government stands at Sh10.1 million.

“President Uhuru Kenyatta announced a stimulus package of Sh1.5 billion for the sugar sub-sector,” Munya said.

“Last week, my ministry sent a team of auditors and engineers to assess the status of farmers’ arrears and factory requirements respectively in all the sugar mills of Nzoia, Chemelil, Muhoroni and Sony.”

He said a new board will be set up to oversee the factory. The CS said they will ensure the new board is composed of people with integrity.

Nzoia Sugar has been without a board since Munya dissolved the one headed by Joash Wamang’oli in August last year. The CS regretted that poor management had brought down many sugar companies and urged the management of Nzoia Sugar to ensure integrity in running the debt-ridden company that was established in 1978.

He assured the farmers that the national government is determined to protect them from cheap sugar imports by sealing all loopholes.

Defence Cabinet Secretary Eugene Wamalwa who accompanied Munya said the money would go directly to the farmers and service providers.

“In previous bail-outs, we have been leaving the money in the hands of managers of the ailing companies but today we are targeting the farmers directly,” said Wamalwa, adding, “the payments and servicing of the machines at the factory will start immediately.”

Munya and Wamalwa lauded the Sugar Bill being pushed in Parliament by Kanduyi MP Wafula Wamunyinyi saying it would revolutionise the sector.

Wamunyinyi said the Bill will also help streamline the sugar sector.

“We are done debating the Bill in the National Assembly and I now call on Speaker Ken Lusaka to fast-track the proposed law in the Senate so the sugar industry can regain stability,” said the lawmaker.

Wamunyinyi’s Bill is pushing for research and innovation that will inform decisions in the sector. It is also calling for tough conditions to guide the importation of sugar.

[Additional reporting by Robert Amalemba]