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September 22, 2017

Nzoia Sugar shut down over debt, lack of raw materials

A file photo of operations at Nzoia Sugar Company.
A file photo of operations at Nzoia Sugar Company.

Nzoia Sugar mill has been closed for lack of raw materials and huge debts that have hampered operations.

For three weeks, the firm has not produced sugar in what management said was due to an acute shortage of sugar cane.

Gilbert Awino, the company’s public relations manager, on Wednesday said the firm lacks adequate funds for maintenance.

"We don't have cane both in our nucleus and out-grower farms. We hope the situation will be better with time," he said.

Awino said the company is also awaiting the Sh300 million cash bailout promised by the national government.

Staff who spoke to The Star on condition of anonymity complained that they have not been paid for two months.

This comes in the wake of demonstrations by cane farmers around the factory, who complained that the firm sold them fake molasses.

The farmers accused the firm of diluting the molasses to meet the high demand for the commodity.

Awino, however, refuted the claims saying the problem was due to a technical hitch and was not deliberate.

The company has also not paid farmers for cane delivered to the factory for the past three months.

"Where do they take the proceeds of sold sugar. Must they always depend on bailouts?" Moses Wafula, a farmers representative, asked.

Wafula blamed corrupt cartels at the factory for its dismal performance.

The Nzoia crisis comes amid the suspension of Mumias Sugar operations despite a Sh1 billion bailout cash from the government.

"Unless proper management is put in place, ugar mills will not survive no matter how much the state aids them.

President Uhuru Kenyatta said the factories suffer because funds are embezzled.

He demanded accountability for money disbursed to the firms by the state during his recent tour of Bungoma county.

Read: Nzoia Sugar crushing below par, risks being closed over cane shortage

Also read: Anxiety as Mumias Sugar set to close indefinitely over cash problems

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