State-run Sony Sugar gets nod to spend Sh30m on equipment
National Treasury has given Sony Sugar Company a green light to purchase a piece of heavy machinery at a cost of Sh30 million in order to save costs.
The move follows intervention by Agriculture ministry to save the State-run sugar company from incurring production losses.
The company has been allowed to procure a new shovel wheel loader to replace one gutted down in 2020.
“National Treasury has reviewed and accepted that Sony should buy a new one,” Hamadi Boga, Agriculture PS said in a letter addressed to the firm’s Acting managing directorAndrew Ligawa.
Ligawa had sought Treasury’s approval through the ministry. Awendo MP Walter Owino had taken up the matter with Agiculture ministry and National Treasury CS Ukur Yatani, who agreed to help the miller.
The miller lost a shovel loader model Komatsu WA320 (KAJ 369s) to a fire accident last year.
Boga said the company had been hiring similar machinery since the fire incident from a third party at a cost of Sh30.7 million for every 300 days which is expensive and uninsurable.
“Your company had insured the machine. However, you were not indemnified against loss by the insurer due to the vehicles poor mechanical and electrical maintenance, you attributed the poor maintenance to cash flow challenges,” it read.
Boga said the sugar company had analysed the cost implications of hiring and concluded that buying a new one will be cheaper.
Incurring further losses
Owino was happy that the purchase of a new loader will cut costs given that Sony was parting with Sh5,700 per hour.
“This would have been damn expensive in the long run and so we advised the government to intervene and salvage the firm from incurring further losses,’’ he said.
The company has set aside Sh30 million from its internally generated revenue to procure a new shovel wheel loader.
Wheel loaders can be used to complete loading goods in virtually any industry that deals with heavy loads, carrying and/or removing trash with the dump of a large bucket.
Sony serves over 35,000 cane farmers spread out within the cane growing zones of Migori, Homa Bay, Narok, Kisii and Nyamira counties.
The miller also contributes to the realisation of Kenya’s Vision 2030 with its current cane production capacity of 2500 tonnes of cane per day.
The sugar mill is among five state owned factories earmarked for privatisation.