Nzoia Sugar receives Sh 216 million for machine maintenance

Nzoia Sugar Company received 216 million from the government for routine machine maintenance to increase milling capacity and reduce operational costs.

The company plans to shut down operations in the next week for the annual repairs.

Chrispine Ogutu, the Nzoia managing director, said we had requested Sh 335 million but allocated Sh 216 million for normal maintenance of machines and other equipment.

He said that 150 million will be spent on spare parts, while the rest of the money will be used to pay experts.

Ogutu said the company had been making losses for the past six years due to ageing machinery.

Our crashing level has been too low, leading to heavy losses. Mr Ogutu said we mill 17 tonnes of cane to produce a tonne of sugar instead of 10 tonnes of cane to produce a tonne of sugar.

He said the losses were due to low crashing capacity, so he took over when the production cost was Sh 8,500 per 50 kilogrammes of sugar, while the same amount retailed at Sh 5,300.

The company will close on May 13 to allow engineers to repair the machines in order to achieve optimum operations, according to Ogutu.

The factory owes about 789 million to the cane farmers, according to Mr Ogutu.

From 2020 to last month, a total of Sh 1.5 billion has been paid to farmers.

He said farmers have paid more than 500 million in addition to the 284 million that were received from the government in December.

He said the company can employ 980 permanent employees but now has 801.

In December of last year, Agriculture Cabinet Secretary Peter Munya and his Defense counterpart Eugene Wamalwa visited the factory and promised the farmers that they would institute a board to facilitate smooth operations, but nothing has happened to date.