NAIROBI, Kenya, Sept 29- Mumias Sugar Company has recorded a further loss in full year ending June 2015 at Sh4.6 billion from a loss of Sh2.7 billion made in 2014.
The management blames the deeper losses to challenges that affected the company during the year especially closure of the factory in the first half as well as shortage of cane production.
“The company experienced numerous challenges that impacted performance adversely. The factory was closed for two and a half months in the first half of the year due to acute cane shortage, the little available was immature and of poor quality,” Mumias Chairman Dan Ameyo explained.
The factory’s poor status arising from prolonged lack of critical spares owing to cash flow constraints experienced throughout the year also resulted to poor recoveries.
The company operations especially the production process suffered heavily during the year recording very high waste levels due to irregularities.
“Start and stop operations caused by frequent breakdowns, insufficient and poor quality can supplies as well as inadequate power supply. These grew progressively worse during the second half of the years,” Ameyo said.
The proceeds from sugar cane drooped by 42 percent to only 1.1 metric tons from 1.2 million in 2014 while sugar recovery levels fell to 6.2percent from 8..97 percent realised in the previous year.
Due to integrated nature of the plant set up, the other business segments were also adversely affected by the poor sugar segment performance with ethanol revenues falling to Sh772 million from Sh1 billion and electricity sales dropping by 74 percent to Sh59 million from Sh230 million achieved the previous year.
The results comes few months after the ailing company received Sh1billion from the government and all eyes are keen to see how the management will use the funds to bring it back to life.
Following the poor performance, the manages says it is keen on managing its operations costs which went down by 32 percent in the year under review.
“Although Mumias Sugar Company is undergoing serious challenges its outlook is propitious. The Board and management have carefully crafted a turnaround strategy which has also been scrutinized and adopted by the leaders and with full support and goodwill of other key stakeholders( government),” the chairman said.