Kepher Otieno

PAYMENT:  South Nyanza (Sony) Sugar Company has asked employees to be patient as it seeks to reduce their accrued arrears estimated at Sh1.4 billion.

Managing Director Stephen Ligawa assured the employees that all will be well soon and thanked them for cooperating with the management during the harsh production times.

“We have started to offset part of the arrears in bits. I assure workers that we will try our level best to reduce the arrears once our production capacity normalises,’’ he said.

The money has accrued since 2019 when the factory’s production capacity dipped by almost 60 per cent thus affecting its monthly and annual income. “We are now paying only current salaries. This started in August last year. My appeal is to workers to be calm and bear with us, if situation improves we shall pay,’’ Ligawa said.

Ligawa who spoke to Business Hub in his office in Awendo, Migori County, said they will review the payments based on their financial stability, adding that currently they were operating on a tight budget.

He said if the firm was operating normally at its installed capacity in the 1970s to produce 3,000 tonnes of cane per day then Sony would be making about Sh60 million each week. But right now, it’s milling less than installed capacity, making it cumbersome to realise its optimal production and revenue targets to meet its financial obligations.

However, Ligawa disclosed that production capacity is already improving after the recent mini-maintenance.

He said they were now making between Sh10 and Sh11 million each week, because they mill less, but expressed confidence that all will soon change if they improve

Over the years, the company has contributed significantly to the realisation of Kenya’s Vision 2030 through sugar production whose current capacity stands at 70 per cent.

 Existing capacity

Ligawa said the company is trying to strategically increase its optimisation of the existing capacity to 3,000 tonnes of cane per day by securing cane availability and supply.

“At the moment our production capacity is oscillating between 2,000 and 2200 tonnes of cane per day. We mill about 200 tonnes of sugar for six days in a week,’’ he explained

But the production is short of the installed capacity of 3,000 tonnes of sugar per day, meaning that the factory is operating below its installed capacity.

Ligawa said main focus now is to strengthen the plant to operate optimally so that they can generate sufficient revenue to pay both farmers, workers and suppliers.

“Our aim is to increase the factory’s efficiency to pay all debts and suppliers once our operations normalizes,’’ he said.