8 December 2012

Kenya: Mumias Blames Poaching for Drop in Crushing Capacity

LISTED miller Mumias Sugar Company has experienced a 2 per cent drop in its gross turnover over and attributed this to cane poaching and low yields.

The company reported a gross turnover of Sh15.542 billion down from last year's Sh15.795 billion.

A total of 1,917,340 tonnes of cane was delivered which was lower than expected. The low supply affected sugar production which dropped from 235,812 tonnes to 174,005 tonnes.

"Cane deliveries were hampered by wet weather, drop in cane yield per hectare from 55 tonnes to 45 and the cane poaching by new millers who do not have established cane growers", said Kebati.

Speaking during the company's annual general meeting at Tom Mboya Labour College in Kisumu, Kebati said the company has put in place adequate measures to reverse the situation by introducing high maturity variety as well as special fertilisers to enhance growth of sugarcane.

"The management is working with the Kenya Agricultural Research Institute to come up with a special fertilisers than can neutralize the acidity as well as liming to rid infertility in the soil", said Kebati.

This also affected the electricity co-generation plant which realised 34,154 megawatts per hour compared to targeted 45,494 megawatts per hour.

Kebati said the company however achieved profitability despite the tough operating environment and challenges in the second half of the financial year. Profits before tax grew by 4 per cent to stand at Sh2 billion

"The operating environment has become more challenging than before, whereas the first half witnessed the perennial adverse weather challenges, the second half of the year witnessed a disruption in cane supply occasioned by political agitation for higher cane prices,", said Kebati.

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