Agriculture ministry
Kennedy Ngumbau
Mumias Sugar
Privatisation Commission
Raila Odinga
The Ministry of Agriculture
Western Kenya

Mumias Sugar crashes into Sh15b bitter loss

Financial woes of sugar producer Mumias is far from over.

The miller on Wednesday reported a net loss of Sh15.1 billion against the previous year’s loss of Sh6.8 billion. The steep rise in the loss was driven by a 101 percent increase in impairment charges to the firm’s plant and machinery, the de-recognition of deferred assets leading to a tax expense of Sh5 billion and low production following plant shutdowns in the first and second quarter of the year.

According to Kennedy Ngumbau, Chairman of the acute cane shortage also attributed to the huge loss.

“The cane shortage significantly hindered throughputs with cane delivered dropping by 32 percent compared to 417,347 tons last financial year,” he said.

SEE ALSO :Farmers pile pressure against sugar zoning

Despite the dismal performance, the board is however optimistic of the miller’s recovery.

Notably, the government has already settled Sh700 million owed to farmers which is expected to have future cane availability.

The management is also hoping that efforts, like cracking down on illegally imported sugar and ethanol and push to resume cane zoning, will help improve miller’s fortunes.

“Discussions with the lenders to restructure the debts and extend the standstill arrangements are ongoing to obtain much needed financial support.”


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During a meeting in Kisumu, Raila painted a gloomy picture of the industry even as fresh reports by both the Agriculture ministry and the Privatisation Commission highlighted the magnitude of the financial problems facing millers in Western Kenya.

The Ministry of Agriculture revealed that about Sh1.9 billion has already been disbursed to offset the millers’ debts to farmers.

Opposition leader Raila Odinga underscored the need to urgently address the problems dogging the sugar industry to improve production and ensure sustainability of the debt-ridden mills.

The inclusion of private companies in the management of the sugar factories, he emphasized, is key to revitalizing the industry.

“The survival of the sugar industry is at stake and we must support efforts by the Government to find a lasting solution to the problem,” said Raila.

SEE ALSO :Setback for Mumias Sugar as cane valued Sh14 million burnt

Raila said the country’s sugar industry is unable to compete regionally or globally due to low production and rooted for completion of the privatization process to improve production.

Currently, he noted, almost all mills are in a deplorable state and lack modern equipment.

“The sector cannot be revived through finger pointing. We should be prepared to take very bold steps,” said the ODM leader.

He appealed to leaders to play a positive role in the revival of the sugar sector. “No investor can come in an unclean environment. Leaders must stop agitation and help in this process,” said Raila.

“We need to strategic partners to help us in the process of revitalizing the mills. We should allow the private companies also to take over the management of some of the companies,” he added.

Raila asked stakeholders to let the plans the Government has to sail through.

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