The shutting down of alternative revenue streams at Mumias Sugar #ticker:MSC is the main reason behind the miller’s failure to pay salaries to its staff over the last five months.
Closure for annual maintenance also cut down income from sugar thus curtailing its ability to meet financial obligations.
Currently, sugar is the only revenue generator following the shutting down of water bottling plant and electricity sale to the national grid, which have now been coupled with the recent suspension of ethanol production.
The Kakamega County based miller owes its employees close to Sh500 million in accrued arrears since February, according to an insider and it is looking upon the government again for rescue.
CEO Nashon Aseka confirmed that employees’ salaries have been delayed because of the financial challenges but they are working to ensure they get settled dues soon.
“For now we are waiting for the Sh500 million that the government has promised the company so that we can pay part of the five months arrears, but we expect normalcy to resume once we start milling,” Mr Aseka said
Even with resumption of milling, the firm will still not be out of the woods as it will not have enough cane to mill due to a severe shortage in its zone.
But Mr Aseka said he has given priority to raw material development as one of his strategies in reviving the ailing firm.
“My focus is on cane development, unless we get sufficient cane for milling, then we shall not be in business,” he said.
Mr Aseka said a lot of farmers had lost hope in the factory with a good number uprooting the crop because of delayed payment, and what he is doing now is to win the growers’ confidence to boost supplies.