The Chemelil Sugar Company has an outstanding Kenya Revenue Authority debt of an estimated Sh1 billion, board of directors’ chairman Benson Owiti has said.
Owiti requested the government to undertake negotiations with KRA on behalf of the company to facilitate the restructuring of the debt based on manageable repayment plans.
In a statement on Monday, he said the debt excludes penalties which need urgent intervention from the government to save the company.
He attributed the debt to an unprecedentedly challenging business due to cane shortage, delayed payment of staff salaries and inadequate funding.
Owiti also appealed to the government for a salary bailout of Sh315 million to employees, which will reduce the current heavy financial burden currently borne by the company. “Due to the adverse business environment the company employees have not been paid their salaries for seven months amounting to Sh315 million,” he added.
Owiti said the severe cane shortage experienced within the Nyando Sugar Belt, which includes the Chemelil zone, has been occasioned by undue competition for sugarcane by other millers who do not engage in sugarcane development.
“The shortage has also been compounded by the drought conditions experienced in the preceding year,” Owiti said. “We asked the government to consider implementing sugar regulations and provide a policy framework for cane zoning.”
Cane shortage had an adverse impact on the company’s operations, which made it difficult for the organisation to meet its financial obligations to farmers and employees.
Last month, Agriculture CS Willy Bett presided over the disbursement of the government bailout of Sh300 million for payment of sugarcane farmers.