Wednesday, May 28, 2008
The government not adequately protecting sugar millers |
The firm’s agriculture manager, Mr Joel Wangendo, said that the company is stuck with thousands of bags of sugar since they cannot compete with imports that have flooded the Kenyan market.
“We have 51, 000 bags of sugar in the warehouse and they’re not moving at al. This translates to over Sh140 million. We can not sell because there is plenty of cheap sugar in the market,” said Mr Wangendo.
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The miller processes between 2,500 and 3,000 bags daily, but the number of trucks picking the commodity has dropped from 10 to one daily.“We have not received any orders at the moment and production is still on. The miller incurs Sh2,500 as production cost per bag and the selling price has to be slightly above that for us to make any profits,” added Mr Joshua Korir, the acting general manager.
Mumias Sugar Company sales manager, Mr Dickson Muthoko, said that the miller has in the recent past experienced a reduction in purchasing power leading to unstable sugar prices at the market.
“The sugar being imported into the country is sold at Sh400 below the price per bag ... leaving our commodity at a distinct disadvantage,” said Mr Muthoko.
However, the company has maintained a stable stock movement of eight tonnes per week.
Players in the industry accuse some exporters of diverting transit sugar into the market. Sugar meant for export does not attract the 16 per cent Value Added Tax (VAT).
The Kenya Sugar Millers Association now wants the government to control illegal sugar imports. Recently, Agriculture minister William Ruto withdrew sugar export licences for 15 traders.
Speaking in Kisumu, the Mumias Sugar Company CEO, Dr Evans Kidero, said that the reluctance exhibited by the government to control the imports is promoting millers outside Kenya.
“This industry if facing difficult times since sugar imports to southern Sudan, Uganda, Rwanda, Burundi and Ethiopia via the country are finding their way into the market and since it’s sold cheaply, it has eaten into our product,” he said.
The millers representatives added that sugar imports from Brazil enter the country through Kismayu in Somalia and no import duty is charged on the commodity.
The millers were speaking in Kisumu during the election of millers representatives to the Kenya Sugar Board.
Dr Kidero, Prof Julius Nyabundi of Chemelil Sugar and Himesh Patel of Lubao Brown Sugar Mills, were elected to represent 12 sugar mills on the Kenya Sugar Board.
Only registered and licensed millers were allowed to take part in the elections.
They included; Shajanand Industries, Farm Industries Limited, Lubao Jaggery industries, Homalime Company, Kibos Sugar and Allied companies, Soin Sugar, West Kenya Sugar, Muhoroni, Nzoia, Chemelil, South Nyanza and Mumias Sugar Company. [Replace]
Source: Business Daily, May 28, 2008