[2008-09-02]  Mumias Sugar Profit Falls 17 Percent

Mumias Sugar Company has reported a 17 per cent decline in its full year profits before tax for the year ended June 30, 2008.The miller registered KES1.5bn in profit, compared to the KES1.9bn it reported over a similar period last year. In a statement of results released to the media on Friday, the company attributed the decline to a difficulty in operating and unfavorable trading conditions in the industry. According to the statement, high costs of production due to increased fuel prices and limitations in transporting raw materials to the factory led to the decline. The company also noted that the post-election violence had led to reduced consumptions of sugar. In the year the firm however had an 11 per cent increase in sales turnover to Sh14 billion compared to 12.8 billion in the previous year. However, the domestic selling price for sugar was lower than in the previous year, squeezing the revenue margin.” This has been due to the high influx of cheap imported sugar and unfair trade practices with undeclared sugar finding its way into the market," said Mr. Meshack Guto, the company secretary in the statement. The firm has in the recent past engaged in co-generation of power and production of ethanol as a means of diversification in the industry. Through the power project, the firm is in the process of increasing its generation from the current 12MW to 38MW by the end of the year. The project is expected to cost about KES3.6bn, with KES2.3bn in funding already secured from Proparco, an international financial institution. Meanwhile Sony Sugar last year paid cane farmers Sh800 million for the deliveries of sugar cane. According to the firms managing director Paul Odola, the amount is expected to increase this year since the company had acquired an additional 30 cane haulage tractors.The new fleet is expected to increase the daily cane delivery capacity to 2,000 metric tones, up from the previous 1,800."Part of our key deliverables in our performance this year will be to see that farmers earn more from the cane deliveries that they make to us," Mr. Odola said in a statement. Sony Sugar serves the out-grower zone in the country, with farmers spread out in the six districts of Trans Mara, Kuria, Gucha, Home Bay, Migori and Rongo.


Source: EAST AFRICA