Devolution Cabinet Secretary, Eugene Wamalwa has sanctioned the temporary closure ofto Nzoia Sugar Company for a two-month maintenance period that will see the high cost of production considerably reduced.
Managing Director, Chrispinus Ogutu, says the factory has run for six years without maintenance against the standard practice of annual maintenance.
He said the delay in maintenance has led to frequent breakages low recoveries of sugar from sugarcane, high milling losses with an average conversion rate from sugarcane to sugar of around 15 tonnes of sugarcane to one tone of sugar instead of 10 tonnes of sugarcane to one tone of sugar.
The move comes after the government though Agriculture Cs Peter Munya who was accompanied by Devolution Cs Eugene wamalwa presented the company with a sh 500 million cheque in November last year (2021), to pay farmers arrears and undertake maintenance.
Mr. Ogutu thanked the government for the financial support.
He disclosed that in December sh 284 million was used to reduce farmer’s arrears which were at 734 million.
14000 farmers were paid a prorated percentage of 38.6.
The balance of 450 million accounting for 61.4 % is still outstanding for cane deliveries made up to 15th of October 2021 and appealed to the government for further financial help.
He said the remaining sh 216 is what was put towards factory maintenance.
He said that already 118 million has been used to aquire spares from oversees and local suppliers and engineers are on sight while sh 47 million was committed on contracted jobs.
The Md said once the current work is done, the company will require an extra sh 123 million to complete the maintenance as some areas that seemed to be in good condition have given way adding that what will remain after the major works can be done while the factory is running,
He said some 647 casual workers from the local community have been brought on board to give the engineers .the necessary back up. 343 are skilled while 304 are unskilled.
The MD said the company is also grappling with staff salary arrears that stand at 707 million while unremitted statutory deductions stand at 1.5 million.
He assured employees that the company will endeavor to pay full salaries and reduce arrears when crushing resumes after maintenance
He thanked employees for enduring harsh working conditions that have been occasioned by poor revenue generation from the sugar business.
The company also owes suppliers sh 600 million in pending bills.
Factory operators and field workshop personnel unable to cope have quit in large numbers for greener pastures affecting operations
The Md said the company has initiated a process that will enable it replace the skills.
Wamwalwa promised that the remaining arrears amounting to sh 450 million will be cleared
He urged leaders from the region to join their hands and provide solutions for the growth of the company.
The Minister said that farmer’s arrears will go directly to the farmers accounts unlike in the the past.
DAP Party leader. Wafula Wamunyinyi said that the factory will be in a healthier condition after the maintenance which will improve its efficiency and efficacy.
Webuye West Member of Parliament, Dan Wanyama was present.