11 September 2012

Kenya: Sugar Cane Loss to Rivals Worries Mumias

Mumias sugar company stands to lose 15 per cent of its projected output because of poaching of cane by rival millers, the CEO Peter Kebati has said.

Kebati said the illegal activity has put the miller in a precarious situation. Kebati yesterday told 300 farmers representatives from Siaya, Bungoma, Busia and Kakamega at the weekend that the company is losing 1,000 tonnes of cane daily to rival millers which translates to 400,000 tonnes a year.

"Our production capacity has deteriorated in the last three months and dropped by 10 per cent because of cane poaching" said Kebati. He said the worst hit region is the Busia zone, where rival millers have colluded with contracted farmers to "steal" sugarcane belonging to Mumias. He warned the farmers against the illegal, activity saying those involved will be dealt with according to the law.

"We have invested more than Sh540 million in sugar cane development in Busia where we have planted cane on more than 23,000 hectares of land with 25,000 contracted farmers. But our rivals are reaping where they have not sown at our expense," said Kebati. He said Mumias will not sit back and allow other millers to travel more than 100 km to buy cane which they have not invested in any sugar scheme.

"We have invested Sh2.5 billion in cane development in the four counties of Siaya, Kakamega, Busia and Bungoma." said the CEO. He said "the total cost of land preparation, seed cane, fertiliser and can harvesting, translates to 60 per cent of the total cost of sugar production in the country."

He asked the provincial administration and police to help stop the poaching. Kebati, who doubles up as the chairman of the Kenya Sugar Millers Association asked the Kenya Sugar Board and the Ministry of Agriculture, to ensure upcoming millers have an established sugarcane base before they are licensed.

Kenya Union of Sugar cane Plantation and Allied Workers Union secretary general Francis Wangara asked KSB to arbitrate the conflict between Mumias and West Kenya and bring to an end the prevailing wrangles in the sugar industry. Wagara said West Kenya's sugar cane shortage was caused by establishment of the rival Butali sugar company. He said Butali should seek to expand its sugar cane plantation base.

"West Kenya should not take its problems to other millers and get involved in conflicts with companies which have operated for peacefully for long time," said Wagara. "West Kenya has no capacity to compete with Mumias, which has diversified its production. Should Mumias decide to use its resources to take on West Kenya, I think West Kenya will close shop." He said it is wrong for a miller to ferry cane from a distance of more than 100 km where it has not established a sugar cane scheme.

Copyright © 2012 The Star. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.