Muhoroni Sugar Factory is on the verge of collapse due to corruption and incompetent management, former Kisumu mayor Sam Okello has said.
Yesterday he said workers have not been paid for two months. It is not clear how much the workers are owed.
Okello said farmers are yet to receive payment for cane delivered for over five months. Farmers are owed more than Sh300 million.
The government-owned company is in receivership. “The receiver managers are not doing any good. They are junior officers from the Agriculture ministry, therefore, they cannot go up there and canvass anything for the farmers,” he said. The former mayor said the factory is currently harvesting immature cane at eight months, instead of 18 months as required.
Okello said harvesting immature canes indicates lack of adequate raw materials, because the factory lacks funds for cane development.
“This means in another year there will be no cane, unless there are concerted efforts to lobby for funding,” Okello said.
He said the national government should give the factory money as it did for Mumias and Nzoia factories for cane development.
Okello said the factory risks closure in the next one month if funds are not availed in time. “The mill is still a government entity and something must be done unless it is somebody’s strategy to sell it cheaply,” he said.
Okello asked the new county administration to prevent the factory from collapsing. He urged for speedy action to end corruption.
Okello said thousands of residents whose livelihoods depend directly and indirectly on the sugar sector will be the worst-hit if the factory collapses.
Kenya Sugarcane Growers Association secretary general Richard Ogendo said the factory owes farmers more than Sh300 million.
He said more than 23,000 farmers will not deliver canes to the mill unless their money is fully paid.
Ogendo said the arrears have accrued since March this year.
He questioned why transporters and suppliers of the mill are promptly paid, yet cane farmers are left out. “We have been delivering cane for crushing. Where have they been taking the money,” Ogendo said.
Ogendo demanded explanation from the factory on why farmers have not been paid.
“The factory has been selling a 50kg bag of sugar at Sh8,000, up from Sh4,000 — and we are not paid,” he said.
Ogendo said lack of payment is hurting thousands of farmers and families whose livelihoods depend on cane farming. “When we ask the management about our dues, all they tell us is that they are waiting for a government bailout,” he said.
Ogendo said they do not understand how senior officials acquire new vehicles if the factory lacks money to pay farmers.
The company’s joint receiver manager Asa Okoth said he has “no comment.”