Kenyan county government disburses US$2.7m financing for cane development ahead of reopening of Mumias Sugar Company

KENYA – The County Government of Kakamega is gearing up for the opening of state-owned Mumias Sugar Company by releasing Ksh300million (US$2.7m) financing to be disbursed to farmers for cane development to ensure the milling company will have sufficient raw materials when it re-opens mid this year.

Governor Wycliffe Oparanya said that sugarcane farmers both contracted by state-owned and privately owner sugar factories are eligible for the loan.

To ensure proper allocation of the funds, Oparanya has signed a Memorandum of Understanding (MoU) with the Commodities Fund Board of Trustees Chairman Samson Okioma.

“We settled on a government agency to disburse to get rid of politics out of the noble idea. The last time we gave out Sh200million (US$1.8m) as a loan to farmers for cane development, there was a lot of politics around it,” said Oparanya.

The county boss also announced that three investors have been identified who want to pump money towards the revival of Mumias Sugar.

“Already three potential investors have submitted their proposals and we are looking at them. In the next two months, we shall have settled on one and hand over the factory to them,” said Oparanya.

He added, “We are preparing the ground for the soft landing. We want them to have a constant supply of raw materials so that when the factory starts crushing, it won’t be closed again for lack of cane to crush.”

Mr. Okioma, the Commodities Fund Board of Trustees Chairman said they are up to the task to ensure Mumias Sugar is fully revived in a bid to boost the region’s economy.

“The release of the money is timely. We want to urge farmers to come for the loans and start planting cane afresh since there is hope at the end of the tunnel.

“With enough supply of cane to sugar millers, we shall be able to revamp the region’s economy and create more job opportunities to the locals,” said Okioma.

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So far, at least 76,000 cane farmers contracted by Mumias Sugar Company had uprooted their cane and ventured into other businesses. Only 20,000 farmers in the region are engaged in cane farming.

The sugar company re-embarked on ethanol production after getting supplies of molasses from other sugar millers i.e., Nzoia, Butali and Muhoroni.

The financially struggling company has been depending on ethanol as its mainstream of income. It halted sugar production over two years ago due to shortage of raw material and a huge debt portfolio.

The miller is producing 70,000 tonnes of ethanol in an eight- hour shift with the consignment sold to Kenya Medical Research Institute and companies that are manufacturing hand sanitisers.

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