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West Kenya Company opens market gap in sugar production



Market News

A crane offloads sugarcane from a tractor. FILE PHOTO | NMG 

West Kenya Sugar Company has extended market share lead as private firms cement dominance in a sector previously controlled by Mumias and other State-owned millers.

The firm, the maker of the Kabras brand, saw its production shoot to 92,044 tonnes in the 10 months to October, registering a 30,000 tonnes growth from a similar period last year, according to latest data from the Sugar Directorate.

This gave it a market share of 22.36 percent ahead of Transmara whose 55,795 tonnes saw it overtake Butali, which produced 54,926 tonnes.

Mumias, majority-owned by the government and for a long time Kenya’s largest miller, produced only 4,768 tonnes in the 10 months, down from 5,235 tonnes as debts, ageing plant and lack of raw material shortage continue to pull down the Nairobi bourse-listed firm.

State-owned South Nyanza Sugar Company emerged the best among the five government millers with a production of 34,000 tonnes followed by Nzoia (21, 245 tonnes), Muhoroni (9,903 tonnes) and Chemelil (10,534 tonnes). Kwale Sugar Company produced 17,000 in the review period but struggled to sell the sweetener.

It sold 17,570 tonnes in the 10 months. Most of the State-owned companies have been performing dismally due to lack of sufficient capital, ageing machinery, mismanagement and political interference.

On the other hand, the private millers have installed new machines that are producing optimally and efficiently and enjoy financial muscle.

The government is selling Sony, Chemelil, Nzoia, Muhoroni and Miwani milling companies to strategic investors in order to allow for the injection of new capital and stem their loss making. The five State-owned millers are steeped in debt amounting to Sh100 billion mainly attributed to mismanagement.

Nzoia Sugar Company owes Sh37 billion, Miwani Sugar Company (in receivership) Sh28 billion, Muhoroni Sugar Company (in receivership) Sh27 billion, Chemelil Sugar Company Sh5 billion and Nyanza Sugar Company Sh3 billion.