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NEWS & CURRENT AFFAIRS

The Nairobian

Miller set to reopen after 6-month lull

Market

By Dalton Nyabundi | Sep 18, 2018

Chemelil Sugar Company is set to resume production after a six-month lull caused by a breakdown of some of its equipment.

The miller has acquired, on loan, the spare parts to some of the key equipment whose breakdown had pushed its crushing capacity to an unsustainable low of 20 tonnes of cane for every tonne of sugar. This was against its optimal ratio of 12:1.

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Sources said the acquisition of the crucial spare parts would now enable the miller to conduct a mini-maintenance to boost output.

In a letter dated July 20, the company’s Head of Agriculture Joel Kiplagat invited farmers for a meeting yesterday to make “deliberations on cane supply of milling operations.”

This came barely two days after Agriculture Cabinet Secretary Mwangi Kiunjuri hinted that the Government would bail out public-owned millers to settle their debts running into Sh84 billion.

Possible bailout

Yesterday, Chemilil Sugar Managing Director Gabriel Nyangweso confirmed that the company was in talks with the Government over a possible bailout.

“We are working on something and we will resume when we are ready,” he said.

The miller, which in November last year received the bailout cheque from former Agriculture Cabinet Secretary Willy Bett to clear arrears owed to farmers, some dating back to 2014, is still in the red and needs another Sh1 billion to get back to profitability.

The company had asked the National Treasury for an additional Sh500 million to pay its workers, who had gone without salaries since March last year; and another more than Sh500 million to complete a comprehensive maintenance of the 50-year-old factory.

The MD said the company’s crushing capacity had been greatly hampered due to frequent breakdown of its machines and workers’ strikes.

“The last time we managed to conduct a comprehensive maintenance was in 2013, when we used Sh500 million. Last year, we sank Sh248 million into repairs, but this was largely inefficient,” he said.

Diversion of cane by farmers in protest of delayed pay has also affected operations. [Dalton Nyabundi]