It’s time to sell off Mumias Sugar to private investors

Business Daily Kenya:  Mumias Sugar Company has a new Chief Executive Officer, the fourth is a span of just five years. Nashon Aseka is not...

Business Daily Kenya: 

A photo of Mumias Sugar packs on sale at a local supermarket.

Mumias Sugar Company has a new Chief Executive Officer, the fourth is a span of just five years. Nashon Aseka is not new to Mumias, having worked there for over two decades as factory manager.

The problem at Mumias Sugar, anyone can tell him for free, is not shortage of sugarcane supply. It’s neither cheap imports nor even its ageing machines. The trouble with Mumias Sugar Company has always been, and remains, management.

What are seen as problems are sideshows that result from mismanagement, caused by weak governance structures. Even the Sh5.1 billion Aseka says the company needs to resume full operations won’t help much if management is not streamlined.

For Aseka, who assumed office on Friday, there is need to keep in mind that farmers are the backbone of any sugar miller. Yet at Mumias, they are the last in priority when it comes to payment.

We have never heard of staff salary delays at Mumias and most other suppliers are paid on time. But, somehow, the suppliers of the most critical raw materials have accumulated debts running into billions of shillings.

[caption id="attachment_275816" align="alignright" width="300"]Local sugar. Photo/Photo/FILE Local sugar. Photo/FILE[/caption]

It not too late for Mumias to learn a lesson or two from West Kenya Sugar Company and Butali Sugar Mills in Kabras, Kakamega County.

For a long time, West Kenya has been run efficiently and profitably. Butali came in just the other day and broke even after a few years.

Their strategy is simple: uncompromising management and paying farmers, first and fast. The turnaround for payment for both is just a week compared to Mumias, which takes months and, at times, years.

No wonder Mumias has to deal with the perennial problem of “cane-poaching” which actually is farmers moving after being attracted to its rivals. Never mind that the combined catchment area of West Kenya and Butali is markedly smaller than the one of Mumias.

Mumias has become the proverbial cat with nine lives, with failure after failure failing to squeeze it out. But it needs to get to a point where the government should have enough of its bailouts for Mumias.

With billions of shillings already poured in by the Kibaki and Uhuru Kenyatta governments, the company is still worse off. If Aseka is not able to turnaround Mumias Sugar in the next two years, the sugar miller should be sold to private investors who can run it efficiently.

This will ensure better and timely pay for cane farmers, which will motivate more cane growing, and create even many jobs. Nzoia Sugar, at the other end, should just be shut and its sugar-belt shared out to West Kenya, Butali and Mumias. The writer is the managing editor of Business Today (http://bit.ly/1ZsCdpA). Email: lmulunda@businesstoday.co.ke

The post It’s time to sell off Mumias Sugar to private investors appeared first on Mediamax Network Limited.

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