Mumias Sugar Company Limited

Mumias Sugar Company Limited is a sugar manufacturing company in Kenya, the largest economy in the East African Community. It is the largest sugar manufacturer in Kenya,[2][3] producing about 250,000 metric tonnes (42%) of the estimated 600,000 metric tonnes annual national output.[4]

For the company's associated football club, see Mumias Sugar FC.
Mumias Sugar Company Limited
TypePublic:NSE:MSC
IndustryManufacture & Marketing of Sugar
Founded1971
HeadquartersNairobi & Kakamega County, Kenya
Key people
Dan Ameyo
Chairman
Coutts Otolo
Managing Director
ProductsSugar
Number of employees
1,689 (2014)[1]
WebsiteHomepage

Location

The company maintains its headquarters in the town of Mumias, in Kakamega County, Western Province of Kenya, near the sugar plantations and factories of the company. Mumias lies approximately 395 kilometres (245 mi), by road, northwest of Nairobi.[5] The company maintains an operations center in Nairobi, the capital of Kenya and the largest city in that country.

Overview

Mumias Sugar Company is primarily engaged in the manufacture and sale of sugar. The company grows some sugar cane; its own estates provide up to 7% of its annual output. Its primary source of sugarcane is over 50,000 registered "out growers" with over 400 square kilometres (99,000 acres) under cultivation. It has also piloted the production of a hybrid high-yielding palm oil variety in areas previously thought too cool for commercial cultivation, in collaboration with the UN Food and Agriculture Organization (FAO).[6] In addition to sugar, the company co-generates 34 Megawatts of electricity. Some of the electric power is used internally and surplus is sold into the nation electricity grid. The company also manufactures 24 million liters of ethanol annually and 20 million liters of distilled water every year.[7]

History

The company was founded in 1971, with the following shareholding profile: (a) Government of Kenya (71% shareholding) (b) Commonwealth Development Corporation of the United Kingdom (17% shareholding) (c) Kenya Commercial Finance Company (5% shareholding) (d) Booker McConnel (4% shareholding) and (e) East African Development Bank (3% shareholding).[8][9] The maximum quantity of sugar produced by the company was in 2005, when output amounted to 269,184 metric tonnes.[10]

Ownership

In 2001, the shares of the company were listed on the Nairobi Stock Exchange, where they trade under the symbol MSC. The table below illustrates the shareholding in the company as at September 2014.[11]

Mumias Sugar Company Limited Stock Ownership
RankName of OwnerPercentage Ownership
1Government of Kenya20.0
2Standard Chartered Nominee Account KE179842.31
3Kenya Commercial Bank1.72
4Jubilee Insurance1.46
5Abdul Karim Popat0.94
6Suresh Varsani0.60
7Pradeep Patani0.59
8Yana Trading Limited0.56
9Ramila Mavji and Harji Mavji Kerai0.49
10CfC Stanbic Nominees Account R576010.45
11Other Investors via NSE70.89
Total100.00

Governance

Dan Ameyo, one of the non-executive directors, serves as the Chairman of the Board of Directors. The Chief Executive Officer is Errol Johnson.

Objectives

The major objectives of establishing Mumias Sugar Company were to:[12]

  • Provide a source of cash income for farmers
  • Create job opportunities since there was no major industrial undertaking in the area at the time
  • Curb rural-urban migration
  • Reduce over-dependence on importation and aim for self-sufficiency in sugar production
  • The Company was also expected to operate on a commercial basis and make profits.

Recent developments

Beginning in 2012, the company began experiencing lowered sugar output and deceased profits, initially blamed on "inefficiency".[13] A forensic audit by the audit firm KPMG, found procedural and financial irregularities which top management had hid from the company's Board of Directors, leading to a loss of over KSh:1 billion (approximately US$12 million), by the company.[14] These developments led to the firing of 52 top managers, including the CEO, CFO, Commercial Director and Company Secretary. The company has asked the government for KSh2.3 billion (approximately US$26 million) in bail-out funds, of which KSh500 million (approximately US$5.6 million) had been advanced, as of the first week of February 2015.[15] Legal proceedings against the major culprits in the scam have begun.[16]

On 24 September 2019, Kenya Commercial Bank Group (KCB), which is owed KSh545 million (approximately US$5.45 million) by Mumias, placed the sugar miller under receivership and appointed the consultancy firm of PVR Rao as the administrator.[17]

See also

References
  1. Simon Ciuri, Victor Juma (2 February 2015). "How President Kenyatta Brokered KSh500 Million Mumias Bailout". Business Daily Africa (Nairobi). Retrieved 2 February 2015.
  2. Wachira, Charles (22 October 2014). "Mumias Sugar of Kenya Idles Milling Plant for Annual Maintenance". Bloomberg News. Retrieved 20 January 2015.
  3. Hezron Ochiel (9 January 2015). "Sugar Prices Expected To Drop As Mumias Resumes Operations". The Standard (Kenya). Nairobi. Retrieved 20 January 2015.
  4. Justus Wanga (15 November 2014). "Troubled Mumias Set To Face Shareholders". Daily Nation. Nairobi. Retrieved 20 January 2015.
  5. "Road Distance Between Nairobi And Mumias With Interactive Map". Globefeed.com. Retrieved 20 January 2015.
  6. FAO, . (24 November 2003). "Hybrid Oil Palms Bear Fruit In Western Kenya: FAO Project Improves Incomes And Diets, And May Reduce Imports of Food Oil". Food and Agriculture Organization (FAO). Retrieved 20 January 2015.CS1 maint: numeric names: authors list (link)
  7. MSCL, . (2012). "Mumias Sugar Company Limited: Our Products". Mumias Sugar Company Limited (MSCL). Retrieved 20 January 2015.CS1 maint: numeric names: authors list (link)
  8. "Overview of Mumias Sugar Company Limited". Mumias Sugar Company Limited. 2012. Retrieved 20 January 2015.
  9. User, Super. "Mumias Sugar Company - Overview". www.mumias-sugar.com. Retrieved 2020-05-26.
  10. "Milestones of Mumias Sugar Company Limited". Mumias Sugar Company Limited. 2012. Retrieved 20 January 2015.
  11. Mburu, Kinuthia (10 September 2014). "How Mumias Stock Has Seen Investors Lose Billions". Daily Nation Mobile (Nairobi). Retrieved 20 January 2015.
  12. User, Super. "Mumias Sugar Company - Overview". www.mumias-sugar.com. Retrieved 2020-05-30.
  13. Margaret Wahito (31 August 2012). "Mumias Profit Drops, Inefficiency To Blame". Nairobi: 98.4 Capital FM. Retrieved 4 February 2015.
  14. Ramenya Gibendi (10 December 2014). "Top Managers Made Mumias Sugar Lose Over KSh1 Billion, Audit Reveals". Daily Nation Mobile. Nairobi. Retrieved 4 February 2015.
  15. Gerald Andae (4 February 2015). "Mumias Suspends 52 Top Employees Over Loss of KSh400 Million". Business Daily Africa. Nairobi. Retrieved 4 February 2015.
  16. Maureen Kakah (3 February 2015). "Mumias Sues Kebati, Three Ex-Bosses In Bid To Recover KSh1.1 Billion". Business Daily Africa. Nairobi. Retrieved 4 February 2015.
  17. Victor Juma (25 September 2019). "KCB Takes Over Running of Debt-Ridden Mumias". Business Daily Africa. Nairobi. Retrieved 25 September 2019.

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