The sugar industry in Kenya has had its better share of challenges and experiences that have seen majority of cane farmers relish in poverty for decades that they practiced the farming.With most sugar companies being owned by the state that also controls a lot of policy making and management decisions that are subjected to a lot of bureaucracy, stakeholders in the sector started going the private way for the factories. Nzoia Sugar Company that is still among the few sugar factories under the ownership of the national government has been struggling to remain operational as it is rocked with debts carried forward from previous years and arrears of payments to farmers, suppliers, and other stakeholders.
Much has been talked in different quarters about its impending privatization that has never been effected due to diverse reasons ranging from political, economical, and social hence having the process pending and the company left to operate under the national government structure.
However, the company’s managing director Godfrey Wanyonyi reveals that privatization of Nzoia Sugar Company shall bring more benefits to the farmers and other stakeholders as compared to the current scenario.
Speaking in an exclusive interview in his office, Wanyonyi said that by privatization, the company will achieve more whereby most decisions shall be arrived at and implemented quicker than now.
“Privatization is basically good for the company because the decision-making process is much faster and also reduces ownership whereby owners can easily come in to correct what needs to be corrected as compared to full ownership by the government, “he said.
Wanyonyi said that the factory that is valued between Kshs 8 billion and 9 billion if privatized shall have a certain percentage of shares held by the government, an individual investor and farmers and workers all who shall have a say in the running of its affairs.
“If we say that an outsider buys the 51 per cent of the shares then the workers and farmers shall buy 24 per cent and the government is left with the remaining 25 per cent hence ownership is shared among the stakeholders,” said Wanyonyi.
However the MD noted that the preparedness among the workers and farmers as far as the buying of the company is concerned is worrying noting that there are no indications that the workers and farmers and the local community are getting prepared to buy the factory when at last it will be set for sale.
“The preparedness with our people is what is lacking because by now our people should be raising money through different means such as forming of Saccos to start saving money to buy Nzoia Sugar company but what we always hear from our people is just saying that don’t sell Nzoia but doing nothing in preparation in case it is sold,” he added.
He therefore appealed to stakeholders including farmers and workers to come together and start raising money to buy the company revealing that according to the value of the company and the sharing of the shares then farmers and workers need to raise at least Kshs 2 billion for the purchase the factory.
Factory needs upgrading
At the same time Wanyonyi pointed out that as much as Nzoia Sugar Company can do better when it is privatized, it can still perform well if its factory is upgraded to start extracting sugar from 7000 tonnes of cane per day as compared to the current capacity of 3000 tonnes of cane per day.
According to the MD, the company needs at least Kshs 8 billion to achieve the upgrading of the machines to get superior capacity.
He noted that at the moment the company spends millions of money in repairing the machines and at times buying new ones to replace the older ones that have been in operation since its inception in 1978.
Wanyonyi further said that the company needs over Kshs 500 million to enable it offset the debts including payment arrears to farmers and suppliers among other stakeholders.
Poaching of cane
The MD also revealed that the company is also facing a shortage of sugar cane such that it is not getting enough sugar to its capacity due to the poaching of its cane by neighbouring sugar companies.
He said that the poaching that is as a result of shortage of cane being experienced in their regions of cane farmers hence have opted to invade the Nzoia sugar belt where they offer farmers with cash money to give away their cane that belongs to Nzoia Sugar Company.
“Our neighbours are poaching our cane from our farmers because in their zones they have run out of cane hence they are out to get through all means even if it is unlawful and thus causing a lot of problems for us here,” Wanyonyi said.
He said the situation has led to the harvesting of premature cane that is below the recommended age of 18 months and above hence there are cases where farmers are being forced to harvest their cane up to as low as fourteen months.
However he said that the company that has over 67,000 farmers has plans to expand on its cane growing zone towards the lower sides of Sirisia and Malakisi to ensure it has enough cane to run around the season.
The MD at the same time mentioned the fluctuating prices of sugar as one of the challenges facing the company but appreciated the government efforts to curb importation of cheap sugar from foreign countries that has proven successful in the recent past.
“I would like to laud the government for having put in place measures that have seen reduction of importation of cheap sugar and therefore it is upon us now to see how we can benefit from such a situation whereby we cannot complain of cheap sugar that had flooded the market,” he said.
Nzoia Sugar Company has its sugar cane nucleus of 3500 hectares and has employed 1300 permanent staff and over 7000 casuals who depend on the company directly.