Mumias Sugar posts 4.6 billion loss
Kenya’s biggest sugar miller, Mumias Sugar Company has posted a net loss of Sh4.6 billion for the financial year ending June 2015.
This is 70 per cent higher than the Sh2.6 billion net loss reported over the same period last year.
Mumias Sugar’s revenue dropped by 57.6 per cent to Sh5.5 billion from Sh13 billion in the previous year.
A month ago, the company’s management issued a profit warning citing shortage of cane, which resulted in lower sugar and ethanol production.
Mid this year, the government extended a Sh1 billion bail-out to Mumias in a bid to help it pay off part of its debts to farmers and get its factory back into operation.
Earlier this month, Mumias Sugar Company dispatched 1,200 tons of sugar into the Kenyan market since operations resumed, three months after the government bailed out the firm.
The company’s Chief of Operations Eng. Josephat Asira said the company is currently crashing 6,000 tons of cane daily producing up to 550 tons of sugar and 70,000 liters of ethanol.
Admitting that the company is under pressure to meet the market demand, Eng. Asira said they have been forced to commence crashing 6,000 tons of cane against the installed capacity of 8,000 tons daily as they gauge themselves.
The Strategy, Planning and Communications Manager Moses Owino said the company is carrying out a cane census to determine the amount of cane it has and whether it can sustain the company’s demand.
He added that their current focus at the moment is to satisfy the company needs as far as cane supply is concerned expressing optimism that the current stalks will sustain the plant as they look at other options that will see the factory run optimally.
According to Owino, the company is targeting to expand its acreage under cane from the current 46,000 hectares to 63,000 hectares for cane sufficiency and it has focused on growing fast maturing cane with a high sucrose content, a move he says will help the company come out of its struggle in sourcing for the raw material.
In June, the government released Sh1 billion shillings to bail out the ailing sugar miller.
Since 2011, Mumias Sugar Company has been on a declining trend.
By June 2013, the once thriving sugar miller slid into a loss of Sh2.2 billion, occasioned largely by declining cane production.
That loss deepened further by June last year to Sh3.4 billion.
By the end of the first six months of its current financial year, which ends at the close of June 2015, Mumias Sugar had posted a loss of Sh1.4 billion.
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