“The main reason we’ve had a turnaround in the business is because this half year, we were growing much more cane than we did in the previous year. Of course, we still continue to face the challenges of cane poaching all over but we were able to bring in a lot more cane by 13 per cent, in fact,” Mumias Sugar finance director John Imbogo told CNBC Africa.
Illegal imports of sugarcane as well as poaching by rival millers has however hit the sugar producer’s business, but it nonetheless expects further improvements in the second half of its financial year.
“We’ve had improvement. We grew revenues by 33 per cent, from 5.4 billion shillings to 7.1 billion shillings. This is primarily because of the impact of the volumes, because we produce more sugar,” added Imbogo.
The company however improved on its producing efficiencies and we were able to produce some 84,000 tonnes of sugar, and also sold 88,000 tonnes of sugar. This was 20,000 tonnes more than last year. Mumias Sugar also brought in 964,000 tonnes of sugarcane, compared to 852,000 tonnes in the last half year.
“The effect of the cost-reduction initiatives that we are putting in place, that is the primary reason we were able to grow our gross margins. In fact, there was a significant growth of about 923 per cent from 141 million last year, to 1.5 billion in this six months just ended,” said Imbogo.
“The Kenya Sugar Board is supposed to have been doing its job, but probably have not been maybe as effective, because currently we have so much sugar coming in from all over the place. The COMESA safeguards are due to expire at the end of this month. The government has put in a request to have these measures extended. We’re hoping that [it will].”