Mumias Sugar Company will only resume normal operations once its contracted farmers are paid their arrears by the government, acting MD Patrick Chebosi has said.
The company owes farmers Sh800m in arrears for their deliveries dating back several years.
It also owes commercial banks and other creditors arrears amounting to Sh20bn.
The miller has remained shut since April this year due to lack of adequate raw material, occasioned by poaching of contracted cane by rivals.
The company is currently producing ethanol from molasses from other millers.
The government has so far pumped Sh3.7bn into the miller but normal operations are yet to resume.
During this year’s Mashujaa Day celebrations in Kakamega county, President Uhuru Kenyatta directed the Agriculture ministry and Treasury to come up with a framework of paying farmers contracted to state-owned sugar millers their arrears amounting to Sh2.6bn.
The state-owned millers are Mumias, Nzoia, Sony, Chemilil and Muhoroni sugar companies.
"We are keenly watching the events on the directive by the president for payment of farmers to be able to draw up our resumption program,"
Chebosi said.
He said that the company management would first map out the available cane on the farms to be sure the crop can sustain continuous operations before crushing resumes.
"Once the farmers are assured of their payments, we shall start our programs because if we were to begin today, the farmers’ morale is too low and you can’t be sure they will supply the cane,"
Chebosi said.
Agriculture CS Mwangi Kiunjuri is yet to visit Mumias in his tour of milling companies to ascertain the authenticity of farmers’ debts as directed by the President before effecting payments.
A task force co-chaired by Kiunjuri and Kakamega governor Wycliffe Oparanya has been set up to come up with a revival plan for the country’s sugar industry.
Last week, Kiunjuri threatened to shut down non-performing sugar factories in the next six months.
He said that the factories should be self-sustaining without always relying on the government for financial help.