Mumias Sugar has suspended its factory operations indefinitely after transporters it has contracted boycotted cane delivery for a week alleging threat to their jobs.
The country's largest sugar miller has also stopped harvesting cane owing to the stand-off.
Margaret Makhungu, the director in charge of marketing and corporate affairs, said transporters have been on a week-long boycott, forcing the sugar miller to suspend its factory operations.
"... there is no cane coming in for crushing," Makhungu said on Friday.
She said talks between the company and the transporters have "have not yielded" positively forcing the move.
Makhungu said transporters were agitated by an advert Mumias placed in national dailies seeking to review their terms of engagement, and asking other interested players to apply for the contracts.
"Our intention was not to relinquish them of their contracts, which have not expired, but to give opportunity to others, especially the local community, who have one or two tractors, widen the supply chain and review transportation costs," Makhungu said.
She said the millers current transporters are inadequate in supplying the factory with cane quantities required for crushing hence the need to seek more service providers.
"We also want to make the local community feel part and parcel of this company by engaging them in doing business," she said.
Mumias Sugar's stock at the Nairobi Securities Exchange has resisted at Sh3 as investors exit the troubled miller.