Managers of poorly run public sugarcane firms put on notice

KENYA – Government plans to do away with poor management and obsolete machinery, which have contributed to the stagnation of the sugar sector.

The region has a number of underperforming public sugar factories which include Muhoroni, Miwani, Chemelil, Awendo, Trans-Mara and Nzoia.

Underperforming State sugar firms will be shut down to pave way for efficient private ones in a move aimed at raising output and boosting farmers’ earnings, a minister has warned.

Agriculture secretary Felix Koskei said the government plans to do away with poor management and obsolete machinery, which have contributed to the stagnation of the sugar sector.

“Factory managers should wake up and improve operations of their companies or leave. They should also strive to replace machines since their bad condition has slowed down productivity,” Mr Koskei said during a tour of Kisumu.

The region has a number of underperforming public sugar factories which include Muhoroni, Miwani, Chemelil, Awendo, Trans-Mara and Nzoia.

The millers owe farmers millions of shillings in unsettled delivery payments.

Mr Koskei said the government would licence more factories with improved technology to replace inept ones which have failed to pay farmers on time.

“The State puts up industries to spur development in rural areas and create employment to stop rural-urban migration, among other reasons,” he said.

The secret of high sugar producing nations like Uganda, he said, lay in their reliance on technology which enables them to diversify into other products like ethanol and bioelectricity.


 

Related Article: Kakira Sugar Works plans to produce Ethanol fuel by 2016


He attributed the high sugar prices to bloated workforce in some of the factories. “To make a profit, the factories have to load expenses onto market prices, making Kenyan products more expensive than those from other Comesa countries.

Illegal sugar

“That price margin is what drives barons to import illegal sugar,” he said.

Mr Koskei assured that the government was addressing causes of the high cost of production, including expensive farm inputs such as fertilisers, seeds, equipment and energy. He urged farmers to use scientific farming methods such as crop husbandry and fertilisers that have the right level of acidity.

“A one-acre farm can produce 80 to 90 tonnes of sugarcane and not 20 tonnes, which our farmers reap. They are then forced to sell the cane to factories at high prices to cushion them from losses,” he said.

Factories that buy at high prices usually transfer the expenses to consumers. At the moment, farmers are selling a tonne of cane to factories for Sh3,500.

Related Article: Mumias Sugar boss sent home as imports investigation starts

August 8, 2014; http://www.businessdailyafrica.com/Corporate-News/Managers-of-poorly-run-public-sugarcane-firms-put-on-notice-/-/539550/2411942/-/db6nsb/-/index.html

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