By Paul Mukana
Operations at Nzoia Sugar Company Limited are expected to be grounded to pave way for a rapid maintenance exercise.
The company’s acting managing director Chrispine Ogutu has told journalists that the maintenance exercise will cost Ksh.216 million and will be done for a period of two months during which the company will be closed.
“When a factory is not maintained,the inefficiencies and frequent breakdowns increases the cost of production,” he said.
He was briefing the media at the company’s premises on Tuesday afternoon.
According to the MD, the maintenance exercise is aimed at improving the quality of production.
Nzoia Sugar Company has been wallowing in poverty over the last 6 years mostly due to frequent machine breakdowns which has catastrophically increased the cost of production.
“It reached a time when our cost of production was Ksh.8,500 per every 50kg bag of sugar and yet we are selling the same bag of sugar at Ksh.5,300.So, you can see that we could not make profits.We were actually making losses and that explains to you why we have accumulated arrears,”said the acting MD.
Apparently, the company owes its farmers an accumulated debt of over Ksh.787 million and it is on the verge of going even further than that unless contingent measures are urgently implemented.
The company noted in its press release that the two months maintenance and renovation exercise will cost Ksh 216 million and various vacancies have been announced on its website (www.nzoiasugar.co.ke).
Mr.Ogutu said that the company has already imported spare parts worth Ksh.150 milion and the remaining amount will be used to remunerate engineers and other technicians who will be executing the task.
The sugar sector in Western Kenya has been battling with economics crises for the past few years which has seen the collapse of giant millers like Mumias Sugar Company.
However, despite cases of sugarcane poaching, drought and lack of enough cane, Nzoia Sugar Company is determined to gradually get back on tremendous production rate.
“Now, instead of continuing like that,we have realized that if we do the maintenance,we will increase our effectiveness and then we will reduce our cost of production.And in that way,we will be able now to pay the debts that have been accumulated,” the acting MD noted.
Most of the company’s farmers had foreseen a bleak future but the maintenance exercise has recalibrated a sigh of relief on their faces.
They now hope that eventually, the sugar millers will get back to track and pay all the pending debts.
Besides, the workers also have faith and believe in the new management team which came into place after workers and farmers staged a demo and kicked out former MD Michael Makokha late last year.
Nzoia sugar was established in 1975 under the Company Act Cap 486 of the laws of Kenya with Memorandum and Articles of Association and Certificate Incorporation No.C13734.
The company is running errands to launch a formidable competition with private entities and importers who have currently dominated the sugar industry in Kenya.