Local politicians blamed for Mumias Sugar woes
Workers from the troubled Mumias Sugar Company have accused local politicians of being used to sabotage the revival efforts of the miller.
What you need to know:
- Workers and farmers blame the leaders of spewing sour politics and stalling an ongoing process aimed at breathing new life to the once thriving sugar giant that provided livelihood to thousands of residents from Western Kenya.
Over 2,000 workers from the troubled Mumias Sugar Company have accused local politicians of being used to sabotage the revival efforts of the miller.
They blame the leaders of spewing sour politics and stalling an ongoing process aimed at breathing new life to the once thriving sugar giant that provided livelihood to thousands of residents from Western Kenya.
“Farmers are owed Sh1.6 billion in salary arrears. We are saddened that the same people we expect to defend our rights are the same ones who are out sabotage the process,” said the workers through their union.
Kenya Union of Sugar Plantation and Allied Workers (Kuspaw) Secretary General Francis Wangara, termed the move as selfish and demoralising to thousands of stakeholders who depended on the lucrative sector.
“As a private company, the Kenya Commercial Bank appointed receiver manager Ponangipalli Venkata Ramana Rao who acted within the procurement laws to get a new investor to revive the ailing company,” said Mr Wangara.
Speaking in Kisumu on Wednesday, Mr Wangara called on local leaders to back the process led by the Lake Region Economic Bloc (LREB) governors to give Mumias a new lease of life.
New investor
LREB chairman Wycliffe Oparanya last weekend said they will support efforts by KCB to bring in a new investor who is capable of turning around the fortunes of the company and restore the confidence of farmers who had opted for other crops.
“We have confidence that KCB will identify the most suitable investor to revive the fortunes of the sugar miller and ensure that it gets back to its feet,” he said after presiding over the 7th LREB summit held at Ciala Resort in Kisumu County.
Mr Wangara further noted as insincere to dismiss Devki Group of Companies for being involved in cement and steel industry.
“This should not be a basis to shun an investor. We have other successful entrepreneurs who have invested in other sectors but are still doing well in the sugar industry,” he stated.
Mumias Sugar was placed into receivership after falling into technical insolvency with total liabilities outstripping total assets by Sh14.39 billion.
To restore the operations of the company, the receiver manager has identified leasing to a private investor as the best way to inject the much-needed capitalization.
Citing political interests and a bid to protect his name and business, Devki Group chairman Narendra Raval withdrew plans to inject Sh5 billion to modernise the company.
He however affirmed that he is still interested to embark on the process if the bidding is conducted in consultation with all stakeholders.
Among other leaders, ANC party leader Musalia Mudavadi pointed out that the plan did not go through public participation. He cautioned that the resuscitation plans for the miller could be disrupted.
Activist Okiya Omtatah has also moved to court seeking removal of the receiver manager saying he has failed to protect the assets of Mumias Sugar.
In the petition, Mr Omtatah says instead of breathing life into the company, Mr Rao has allegedly mismanaged ethanol operations and shut them down in March, thus halting all manufacturing operations at the company.
