Chemelil Sugar Company is located along the Awasi-Nandi Hills road in Nyando District of Nyanza province, approximately 50 kms from Kisumu City.
It was established in 1965 as a private limited company and later became a parastatal in 1974.
When the Company was set up in 1965, it had two major objectives:
- To produce high quality mill white sugar as part of a national strategy for achieving self-sufficiency in food production; and
- To contribute towards the integrated national economic development within Western Kenya.
At that time, the Government adopted an import substitution strategy, which aimed at protection of local industry.
But changes in government’s business policy have necessitated the company to change and reflect a new corporate direction, with the principal objectives focusing on:
- Efficiency in Production and Service Delivery
- High Turnover and Returns to Shareholders
- Profit maximisation
- Stimulation of Economic Development
The above objectives are being pursued while paying close attention to issues of Environmental management guidelines, good corporate governance and gender rights.
CHEMELIL SUGAR COMPANY LIMITED
The attention of the Board of Directors and Managenent of Chemelil Sugar Company Limited has been drawn to a story titled 'Chemelil on brink of collapse over Sh.300m debt’, which appeared on page 22 of The Standard newspaper dated 1st February, 2016.
We take this early opportunity to clarify and put the record straight regarding concerns and allegations highlighted by the story which are not factual, are inaccurate and a misrepresentation of the facts obtaining on the ground.
Foremost, we would like to assure our stakeholders, who among others include sugarcane farmers, transporters, sugar, molasses buyers, company employees and members of the company's immediate surrounding community that the firm's operations are on-going and vibrant.
The allegation in the story that ‘Chemelil Sugar Company is on the brink of collapse’ is a gross misrepresentation of the actual state of affairs obtaining at the organization. And, thus from the onset we would like to state unequivocally that the company is not on the brink of collapse due to the allusion and allegation in the story, that farmers have stopped supplying cane to our factory.
The true position is that the recent El-Nino weather phenomenon that was experienced in most parts of the country had an adverse impact on company operations
One of the effects of the El -Nino on company operations was reduction in cane haulage and supply to the factory due to heavily water-logged cane farms within both our nucleus estate and to a large extent the outgrowers estate, which supplies 85 per cent of the raw material cane to the factory. This resulted in low sugarcane supply to the factory with the month of November 2015 which received 20,055 tonnes.
Due to unprecedented heavy rains experienced late last year arising from this weather phenomenon, the company registered low sugarcane supply to the factory with the month of November 2015 recording 20,055 tonnes of cane supplied to the plant.
Nonetheless, the made strident efforts to ensure steady sugarcane supply to the factory was maintained and sustained, resulting in a slight improvement with the month of December 2015 recording a cane supply of 23,879 tonnes.
However, between last November 2015 and January 2016 sugarcane supply to the company's factory from both nucleus and outgrowers estate farms has increased by 63 per cent to stand at over 32,000 metric tonnes of cane supplied by the end of the first month of this New Year.
As the weather conditions continue to improve the company's Outgrowers Section expects the cane supply by farmers to the factory to hit and increase beyond 40,000 tonnes in a month.
It is also instructive to note that, Gakwamba Farmers Cooperative Society, whose official Charles Atyang Atyang is quoted as being critical of the company's financial status and factory operations is unaware that the company has continued to receive cane supplies with Chemelil Outgrowers Company(COC) being the leading supplier followed by Harjit Singh Pandhal.
Suffice to note that the last week of January 2016, between 25th to 31st which the story depicts as having experienced stoppage of cane supply to the factory, actually recorded a very high tonnage of cane received which plant records show stood at 8,083 metric tonnes as our transporters continue to make deliveries.
Thus the low sugarcane supply information attributed to Atyang in the story is inaccurate and intended to mislead for ulterior reasons more so considering that the views expressed by the official cannot purport to represent the views of the 10,200 farmers contracted by the company.
Aytang's allegation that farmers are now diverting cane supplies to West Kenya Sugar Company are also misleading since the latter does not collect any sugarcane from the Chemelil zone, except for Kibos Sugar & Allied Industries Limited which competes for the cane we have developed using our funds through inducements the firm extends to growers within our zone.
At this juncture, it is also important to clarify, foremost that Gakwamba Farmers Cooperative Society does not manage any farmers funds on behalf of Chemelil Sugar Company and that the amount the company owes growers in terms of cane arrears stands at Kshs.185,756,869.55 million as at 31st January 2016, having been reduced from the initial figure of Kshs.256,585,796.25 million.
However, it is also instructive to note that out of the current cane arrears of Kshs.185,756,869.55 million owed growers, the company has already paid farmers Kshs. 70,828,926.70 million as advances.
The accrued cane arrears the company owes farmers is for a period of one month in August 2014, including the period from 20th July upto 8th November 2015.
Still in the face of the foregoing, Chemelil Sugar Company is ahead of all other millers operating in the Nyando Sugar-belt in terms of cane payments with the firm paying farmers for their deliveries to the factory on a weekly basis and is up to-date upto the first forthnight of January 2016 as farmers and transporters unrelentingly continue to support the company.
In tandem with the increase in sugarcane supply to the plant, factory milling and bagged sugar production figures equally increased by 61.8 per cent and 80 per cent respectively, during the period under review-November 2015 to 31st January 2016 .
The factory crushed 20,505.35 metric tonnes of cane in November 2015, which increased to 23,629.08 metric tonnes in December of the year under review and further improved to 33,181.39 metric tonnes by end of January 2016.
During the period under review and more particulary in January 2016, a month which the story is critical about the level of cane supply to the factory and alleges there was stoppage of supplies of the raw material, plant operations were normal with the factory recording only 51.42 hours in out of cane stoppages, which translates to two full working days, lost.
Therefore, the allegation that the company's factory crushing capacity currently averages four days in a week is outrightly untrue as indicated by the factory breakdown and stoppage records at our Factory Department.
Thus, factory operations were only unstable during the El-Nino period including a period of January 2016 when the equipment used for pushing bagasses out of the plant broke down occasioning a total out of cane stoppage of 127 hours.
Meanwhile, the company has laid down a strategy with the participation of stakeholders to carry out a factory rehabilitation programme, scheduled to take place within the next three to four months period.
The scheduled factory rehabilitation programme is aimed at enhancing the plant's efficiency, throughput and production , ultimately increasing the company's revenue base and enable it to timely service all its financial obligations.
The alleged factory maintenance cost of Kshs. 2 billion is a gross exergeration of facts, since such a collosal amount of funds can only be required in putting up a new plant or in entirely upgrading most of the factory’s equipment and machines.
And the allusion in the story that sources within company management have intimated that the firm owes the following organization Kenya Power Company (KPC) including statutory bodies such as National Hospital Insurance Fund (NHIF), National Social Security Fund (NSSF) millions in accrued debts is inaccurate and equally misleading.
The true position is that the company does not owe Kenya Power Company (KPC) any electricity bill amount neither does it owe any statutory organizations including NHIF and NSSF any accrued debt.
Therefore, the information presented to the public domain by the newspaper contained in it, some inaccuracies and misrepresentation of facts, which was misleading about the actual state of affairs at Chemelil Sugar Company Limited (CSCL).
By Bosco Magare
Chemelil Sugar Company Limited
Date: 1st February, 2016
COMPANY PUBLIC COMPLAINTS COMMITTEE SENSITIZES EMPLOYEES AND STAKEHOLDERS ON SERVICE
By Chairman Public Complaints Committee
The Company Public Complaints Committee encourages employees and stakeholders to use the appropriate complaint form available in this Website to seek resolution and feedback on any issue.
Employees and stakeholders use of the forum and interaction with the same will provide the company with requisite feedback that is vital in enhancing organization service delivery.
For more information, especially on the procedure of lodging complaints, employees and stakeholders are requested to visit the Company Public Complaints Committee Secretariat domiciled in the Management Accountant’s office located on the first floor of the Chemelil Sugar Company Limited’s Main Administration Block.