Business Report by Leo Odera Omolo

South Nyanza Sugar Company (SONY SUGAR) is looking for funds to expand its factory capacity from 2,500 tons of cane per day to about 3000 tones per day.

The operations of the Awendo based white sugar manufacturing firm is, however, hampered by acute shortage of tractors for haulage of cane from the field to the factory.

In normal circumstances Son Sugar required about 125 tractors in its haulage fleet. But there are only about 86 tractors in its current transport fleets. Some of these machines are old and cannot provide efficient transportation system, hence the complaints about a lot of over mature cane rotting in the field and cannot be harvested in time.

But the company has assured the farmers to be patient as the situation is being addressed adequately, and once the programme of harvesting, which is already put in place is fully implemented all the mature cane standing in the farms will be harvested systematically.

The company managing director Paul Odhiambo Odola said that the Company would readily welcome more investors to invest and bring more tractors to boost the company transport fleet.
“Once this is achieved, the question of over mature cane rotting in the field would be something of the past,” he added.

Mr. Odola told this writer in his Awendo office that the company need to achieve three important components, which include efficient cane transport system stable local marketing system for its made sugar and tentative harvesting programme, which will be carried out systematically.

He said the company which has employed 1,300 staff and worker is currently grappling with the repayment of debts running into millions. It is servicing Kshs 283 million it owed the KRA through VAT and further owned Sugar Development Fund {SDF}a colossal amount of money to the tune Kshs 246 million

SONYSUGAR is required to clear the outstanding debts at the rate of Kshs 3.5 million per week, which brings it Kshs 14 million per month and Kshs 148 million per annually

Apart from 1300 permanent and pension able staff and workers it has extra casual workers whose numbers are close to 806 bringing its monthly wages bill close to Kshs 20 million per month.. But the number of the workers could still be streamed down by half, while production remains at the same level, said Mr. Odolla..

The company is also grappling with many hiccups such as corruption and forgeries cases. In recent past several attempts were made by some unscrupulous traders to defraud the company of its money through the purchase of its sugar worth millions of shillings. But the CEO was glad that these frauds were detected immediately and one case is still under investigations by police..

One trade had presented a fake bankers Cheque valued at Kshs 4,000 but the cheque was forged to read Kshs 4,000,000 and attempt to use the cheque in purchasing huge bulks of made sugar from the factory’s warehouse, but after a thorough security and verification, the cheque which came from Nairobi bank was detected.

Another attempt was recently made by a Migori trader whose name is withheld.The trader had presented the company with a fake banker’s cheque worth Ksh 9 million. But the cheque was detected to have been a forget one and the matter was handed to the police for further investigation.

In all cases, the culprit had presented the banker cheques hoping to purchase large quality of sugar fraudulently.

The Migori trader has yet to appear before the court but the matter is in the hand of police.

The MD said company had already put in place the cane harvesting system, which when fully implemented would see all over mature cane harvest in all its zones. But the programme has been watered down due to recent excessive burning of cane in its Trans-Mara zone, which forced the company to mobilize all the available transport to ensure that all the burnt cane reaches the factory immediately before it go int9o mwaste..

Close to 200 hectare of can recently went in smokes, especially in the Trans-Mara zone and the turn of event forced the company to alter its harvesting system to make some of the burnt cane get to the factory. This an unlikely even grossly interfered with the harvesting programme. But ti was unavoidable owing to the prevailing dry spell and drought…

This become necessary because the company had invested its money in land preparation and cultivation, therefore it could have incurred heavy financial loses copse close to 100 million shillings in the burnt cane if it could have the cane abandoned to rot in the field.

Other envisaged project include plan to produce ethanol, bailing of bagasses and power generation to improve its income. These projects have already been included in the company’s budget for the financial year 2009 and 2010.

SONYSUGAR has been experiencing isolated cases of political interference in its operation in the past. Some of the Sony sugar company employees had adapted the nasty ideas of seeking political patronage from their .Godfathers, particularly the politicians when cornered with disciplinary action and asked to defend themselves for wrong doing and gross misconduct.

The example is a case of the top security manager who was recently served with suspensions and executed interdicted following allegation and complaints that he was involved in inciting the factory worker to go on strike..

In stead of the man defending his case before the board, he had run to politician seeking his support for him to be reinstated. There is cordial working relations between SonySugar top management and junior staff and workers, said the MD. He stronbgly refuted a recent report in the newspaper stating that the company workers would soon lay down their tools due to some misunderstanding dismissing such reports as falsified and malicious.,

The company is also trying hard to treat the COMESA deadline when requires the sugar manufactures in Kenya to reduce their protection cost in order to compete with subsidized sugar importers from COMESA region.

Sony Sugar has contracted about 25,000 farmers in its sugar cane growing zones zones covering seven administrative districts of Rongo, Migori, Ndhiwa, Gucha, Trans-Mara and Kuria. It has an equal number of non contractedf farmers in all those districts. It is indeed the ‘mainstay of the region’s economy.

Ends
leooderaomolo@yahoo.com

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Date: Sun, 1 Mar 2009 04:20:03 -0800 [03/01/2009 06:20:03 AM CST]
From: Leo Odera Omolo
Subject: HEAVILY INDEBTED SONY SUGAR IS GRAPPLING WITH TRANSPORT SHORTAGE BUT POSITIVELY ON THE WAY TO FULL RECOVERY.