Nzoia Sugar Company has paid Sh1.04 billion arrears owed to farmers for sugarcane delivered between July 2012 and February.
Managing director Saul Wasilwa yesterday said the money was paid to 28,580 farmers in the Nzoia sugar belt. Cane growers contracted by the company are paid Sh3,800 per tonne of sugarcane.
Wasilwa said: "We are now up to date with regard to farmers' payments as of February 28 and within the 30 days waiting period as per our mandate."
He said payment for last month's deliveries will be released soon. The sugar industry is facing a slump in prices as a result of surplus production which has led to unsold stock piles.
"High prices of sugar in November 2011 spurred increased production. By September there was an excess 5 million tonnes of sugar in the world market that led to a fall in
prices prompting millers to adopt a wait and see attitude," Wasilwa said.
He said Nzoia has disposed off 90,000 of its 100,000 bags stock pile and used proceeds from the sale to clear outstanding payments.
"Prices had fallen to Sh4,600 per bag but have now appreciated slightly to Sh4,800. We are now crushing and selling but our operations have been difficult because of the heavy rains that have caused excess mud in harvesting fields in the sugar belt," Wasilwa said.He said the company is scrutinising its 1,300 permanent employees academic certificates and will fire those with fake papers.
Wasilwa said they are making certain decisions in consultation with the Agriculture ministry following the expiry of the tenure of members of its board of directors. He added that the gazettement of new ones will take place once President Uhuru names a new Cabinet.
