Mumias Sugar: On Its Deathbed?

Cane yard with sugarcane for crushing at the Mumias Sugar Company. Photo/File
Cane yard with sugarcane for crushing at the Mumias Sugar Company. Photo/File

Sugar milling giant, Mumias Sugar Company, has all but breathed its last.

And even as the country's top miller fights for its life, hoping for a bailout from the state, it is just a matter of time before the curtains come down on the operations of one of the country's most celebrated corporate giants.

The tight lid that has characterised the 'success' of the company has been ripped open, exposing a conglomerate that is tottering on precariously. Hailed as a case study of sugar milling success in Kenya, the collapse of Mumias Sugar Company hardly comes as a surprise.

It is a matter of common knowledge the miller has been in a state of plateau, and quite for a long time, only that a diabolical conspiracy pitting the state and the management have been reluctant to as much as own up this inevitable truth as offer solutions for its turnaround.

As sure as cows eat grass, this inevitable truth finally landed last year when the firm's milling machines unexpectedly stuttered to a halt for lack of raw materials. Angry farmers, long used as the doormats to Mumias Sugar Company's so-called success, say enough is enough.

They have rebelled and vow never to deliver their cane to the factory again. Instead, the peasants have opted to supply their produce to other millers within the vicinity, such as Kabras, West Kenya, Butali and so on, who, though exploitative as Mumias Sugar Company, are offering farmers slightly favourable terms of payment.

The farmers have received support from the strangest of places – the transporters, who in a show of solidarity have refused to do that which they are contracted to do – transport cane to the factory – further heightening the crisis at the country's biggest miller. The death of Mumias Sugar Company will reverberate far and wide, no doubt.

But it is highly unlikely a tear will be shed in the area where residents associate with the poverty and deprivation that reign supreme.

Even after 41 years of its existence, life in the sugar belt remains nasty. Mumias sugar belt is probably the only region in Kenya where life wedges a tough battle against poverty, adversity and deprivation in the midst of a manufacturing giant. To most farmers, Mumias Sugar Company symbolises the crushing poverty and servitude common in the area.

Those of us who grew up in this sugar belt have fond but distasteful memories of a company that we simply referred to as “Bookers”.

Motivated by the desire for economic emancipation, our parents surrendered their pieces of land to the company for the cultivation of the crop in the hope of better tidings.

Lamentably, that is as far as it went. The dream has turned into a four-decade nightmare in which farmers have been staring into poverty right in the face.

To say that farmers contracted by Mumias Sugar Company earn peanuts is to put a rather positive spin to a matter so shameful to many people and which defines the standoff, pitting farmers and the company today.

The conditions were so bad that most farmers operated debit accounts as deduction, for inputs advanced to farmers by the company far outstripped the income from cane harvests. More often, families were forced to explore alternative income streams to educate their children, because income from cane harvest was as regular as a leap year.

"We owned large sugar plantations, but our families could not make both ends meet.

Basic needs such as table sugar were a luxury that was always out of reach, even though there was endless supply of sugarcane in the homesteads," a farmer said.

"The collapse of Mumias Sugar Company, thus, is a welcome development as it heralds a new beginning and shatters the many false hopes that have festered in the minds of our parents like a jigger's wound."

As most families feasted on sugarless gruel because of their inability to afford the cost of sugar, every soul within the factory, right from the CEO to interns and millions of visitors who toured the firm were given tonnes of sugar as a token donation.

The collapse of the giant, like the case of Mumias Sugar Company, doesn't occur overnight; it is always a process, usually characterised by a chain of mistakes or failures, which in this case were serial and systematic.

Assailed by huge debts, perennial inept managers, corruption and the challenges of cheap smuggled sugar, Mumias Sugar was an accident waiting to happen.

Authorities, both in government and the firm, must take full responsibility and own up for authoring the misfortunes of a company that held so much promise, but now which ends up tragically.

From the outset, the company made no effort to conceal the fact that it had no time for farmers, choosing instead to deal with them through a mixture of spite and disdain. The company capitalised on the situation and imposed an elitist legal regime that placed the farmer at the periphery.

Despite high levels of illiteracy, the farmers had to sign contracts whose contents they knew nothing about. Written in a typical legal jargon, the contracts were highly skewed in favour of the miller in which the poor peasants surrendered every ounce of their rights to the miller.

Under the terms of the contracts, the costs of virtually everything – ploughing, furrowing, seeds, harvesting and transport and all other farm inputs – were borne by the farmer under terms that attracted a high interest rate annually.

Farmers toiled in the sugarcane fields for long periods, but the crop was harvested, transported and weighed at the factory in their absence.

There were no delivery notes and it took months before the company delivered invoices for the goods. Through this arrangement it was a complicated for farmers to tell whether the invoices they received were true reflections of the quantity of the delivered canes.

Throughout the existence of Mumias Sugar, the management was categorical that its interests revolved around protecting or advancing the interests of shareholders, not farmers.

“As long as shareholders are happy, then farmers can go hang,” one of the firm's CEO once told farmers in Butere town.

Throughout this period, the company was the cash cow for a powerful elite of political brokers. It was the endless source of cash for political party youth wingers who stormed the place, and walked with funds for political mobilisation.

Large amounts of money was paid out to powerful civil servants in the region, especially those in the provincial administration, for what described in hushed tones as protection fee.

As things worsened, the company's share certificate lost meaning to farmers who started selling them cheaply to some sleek individuals who swarmed the region like migrating raptors.

The long dead Mumias Outgrowers Company aka Moco was supposed to be the farmers' representative in all dealings with the Mumias Sugar Company.

It was Moco which was supposed to ensure farmers interests were taken care of, but it proved a worse burden as it was always disconnected from issues that concerned its client. Moco also exploited the contracts between the miller and farmers, and created its own class of cane farmers who, on paper, delivered the largest quantity of cane to the company but in reality owned not a centimetre of cane plantation. In the absence of the farmer from the weighing bridge, some mandarins within Moco connived, skimmed off and apportioned part of the cane delivered to the factory.

This was later shared by a powerful clique of individuals in both Moco and Mumias Sugar, who in a typical Kenyan fashion want to eat or benefit from where they have not toiled to the detriment of the farmer. Sugar from Mumias Sugar Company is the most expensive of all sugars in the retail market today.

All known supermarkets chains are packaging and selling sugar in packets with their trade marks, which are retailing at a much lower price than that of Mumias Sugar Company.

With this, it is doubtful on whether even with the Sh2.7 billion bailout Mumias can get back on its feet and produce sugar that will retail at a much lower price than what the supermarkets are offering.