KENYA – The Sony Sugar Company, a state
The company’s management has therefore appealed to the Parliament to help it secure the funds from the Treasury that will see the company spring back to life, reports Business Daily.
Mwita Nyange, who chairs the finance committee of the company’s board is confident that a turnaround of the miller is possible and challenged the parliament to help the company access the funds as has been the case with the revitalisation of Eldoret-based Rift Valley Textiles (Rivatex).
“If we get an injection of Sh400 million (US$4 million) our cash flow will increase between 50 and 60 percent and we shall not ask any cent from the public coffers,” Mwita, told the Agriculture Committee of the Senate last week.
According to the acting Managing Director, James Oluoch, massive poaching of its cane in the last five years has been a major driver propelling the company to a cumulative loss of more than 900 hectares of cane.
He said that this was valued at US$2.3 million (Sh2.3 billion) and direct investment in terms of input and services rendered to farmers amounting to US$0.288 million (Sh288 million).
During a meeting where the company board and management had appeared before the committee to brief parliament on the status of the factory, Mr Oluoch unveiled that the company’s total debt as at October 2018 stood at US$4.3 million (Sh4.3 billion).
He said fluctuating and unpredictable revenue flows and failure to maintain the factory since 2016/17 financial year has severely affected the plant.
The company’s debt comprises of farmers’ arrears, staff emoluments, staff welfare organisations, outstanding payments to service providers and suppliers, statutory remittances, unremitted pension contributions and retirees’ dues, tax arrears and loans from the government.
The factory has experienced frequent breakdowns resulting in high downtime, inefficient milling, low throughput, discontinuous processing, poor extraction and ultimately reduced production of sugar.
“Milling capacity has reduced from an average of 2, 750 tonnes of cane per day to an average of just 1,500 tonnes of cane per day, which translates to 45.5 per cent reduction,” Mr Oluoch said.
“We need funds to maintain the plant and there are chances that we may close down if things don’t improve,” he added while challenging the committee to intervene and save the company from cane poaching.