Nzoia Sugar receives 500million shillings bailout from treasury
The national government has released Sh 500 million to Nzoia Sugar Company in its efforts to revive the miller.
The money is part of the 1.5 billion shillings the National Treasury has set aside to bail out struggling state sugar companies in western Kenya.
Agriculture Cabinet Secretary Peter Munya, who handed the check to the company on Tuesday, said the money would be used to pay farmers, workers and maintenance of machinery at the plant.
âThe money will help revive the miller’s operations while boosting employee and farmer morale,â said Munya, who spoke at the company’s offices in Kanduyi constituency, Bungoma County.
He added: âAt least 200 million shillings will go towards machine maintenance and some repairs at the plant to increase its crushing efficiency.
Currently, the factory produces one ton of sugar from 15 tons of crushed sugar cane.
“This shouldn’t be the case. In an ideal situation, the miller would produce one ton of sugar for every 9-10 tons of crushed cane,” the CS said.
Another Sh200 million will be used to pay farmers while Sh100 million will go towards the salaries of some 700 employees of the company. The last time workers were paid was in April of last year.
The company owes farmers 743 million shillings while transporters owe 182.4 million shillings. The cane harvesters demanded Sh71.3 million.
Nzoia Sugar owes Nzoia Out Growers Company (NOCO) 4.8 million shillings. The unpaid debt to the county government amounts to Sh 10.1 million.
President Uhuru Kenyatta announced a 1.5 billion shillings stimulus package to support the sugar sub-sector.
âLast week my ministry sent a team of auditors and engineers to assess the status of farmers’ arrears and the needs of factories in the four sugar factories of Nzoia, Chemelil, Muhoroni and Sony,â Munya said.
He said a new board of directors will be set up to oversee the plant.
Nzoia Sugar has been without a board of directors since Munya dissolved the one headed by Joash Wamang’oli last August.
The SC regretted that poor management brought down many sugar companies and urged the management of Nzoia Sugar to ensure integrity in the management of the debt-ridden company which was established in 1978.
Munya assured farmers that the national government was determined to protect them from cheap sugar imports by sealing any loopholes through which imports are smuggled into the local market.
He said unscrupulous businessmen engaging in illegal activities would be treated firmly.
Defense Cabinet Secretary Eugene Wamalwa, who was accompanying Munya, said the money would go directly to farmers and service providers.
âIn previous bailouts we left the money in the hands of the leaders of struggling companies, but today we are directly targeting farmers,â Wamalwa said.
Munya and Wamalwa hailed the sugar bill presented to parliament by Kanduyi MP Wafula Wamunyinyi, saying it would revolutionize the sector.
Wamunyinyi has been at the forefront, fighting against illegal sugar imports. He also called for the rationalization of the sugar sector, goals which he said will be achieved through his bill.
“We have finished debating the bill in the National Assembly and I now call on Senate Speaker Ken Lusaka to expedite the law in the Senate so that the sugar industry can realize its common sense,” said the President of the Senate. legislator.
Among other things, the bill calls for research and innovation in the sector in addition to imposing strict conditions on sugar importers and defending the rights of sugar cane producers.
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