Mumias brand in shops despite no production
Mumias Sugar is on the spotlight after it emerged that the miller’s products are awash in the market despite no production going on at the firm.
A spotcheck by Business Hub revealed that several retailers are selling the branded sugar, raising concerns about its source.
This comes amid reports that 20,000 bags of sugar imported from Zimbabwe in 2018 is in circulation after being repackaged for consumption in the domestic market by unscrupulous traders. the sugar had been condemned by the Kenya National Bureau of Standards.
The troubled miller resumed operations under controversial circumstances in December last year, but was forced to temporarily close barely six months into operation in May this year for lack of cane.
Further, the manufacturer has begun the process of downgrading its capacity to cope with the low sugarcane tonnage, following sugarcane scarcity.
An impeccable source at the company told the Business Hub yesterday that the management has laid the foundation for a milling plant that they plan to import from Kinyara Sugar Works, Uganda next week, and it will be constructed next to the diffuser to deal with the low supply of sugarcane. Kinyara is a subsidiary of Uganda’s Sarrai Group, which is currently running the Mumias facility through Sarbjit Singh Rai.
“They said they are bringing in a mill from Kinyara. Last week, they started measuring the ground next to the diffuser,” said the source, who is not authorised to speak on behalf of the miller.
The Ugandan firm won the multi-billion shilling leasing tender for Mumias despite a court order suspending the takeover. “We are going to shut down our factory for two weeks with effect from Thursday (May 11, 2023) following an acute shortage of mature cane to crush. This is to allow the agriculture teams to carry out an assessment and cane inventory,” the company said in a notice to workers, promising to communicate the resumption date in a fortnight.
Creditors money
Mumias was placed under receivership in September 2019 by KCB Group to protect its assets and maintain its operations. The company owes creditors among them KCB, NCBA, Ecobank, Stanbic, Proparco and the National Treasury over Sh3 billion.
Prior to stopping production, the miller, who has a quarter of its nuclear acreage under plantation with 4-months old cane has had to contend with stiff competition from Butali, Busia and West Kenya sugar factories to buy scarce mature cane from private farmers.
The diffuser has optimum crushing capacity of 4000 tonnes of cane per hour (tch), but was doing between 3500-3800 tch. Because of scarcity and distance the cane is procured from farmers, the company was forced to accumulate cane at its cane-yard before crushing.
Simon Wesechere, the Kenya National Federation of Sugar Farmers is on record blaming the current sugar crisis in the Western Kenya Sugar belt, saying it has disillusioned cane farmers, forcing them to ditch sugar cane farming for alternative crops like maize.
“We have a problem in the Western sugar belt, especially after many farmers quit when factories fail to help them. This was the reason factories hiked cane buying prices after noticing the shortage and will soon be crushing below their optimum levels or will simply close down for lack of cane,” Wesechere said earlier on.
Last week, the owner of Sarrai Sarbjit Singh Rai, Rakesh Kumar and Stephen Kihumba, were found guilty by the High Court over failure to cease operations at the firm and were fined Sh100,000 each and asked to appear at the commercial division of the High Court for sentencing.
