A coverage note on Mumias Sugar by Sterling Capital says that poaching has cost Kenya’s biggest miller, Mumias Sugar, Sh7 billion in the last two years and the problem does not look like it will end soon.

... also notice competition coming soon from Kwale International Sugar Company Limited (Kiscol) >>>

Kiscol has 20,000 acres in the coastal region, which better suited for cane growing due to the shorter maturity period over cane grown in the western Kenya sugar belt. The project is expected to be completed by mid-2014 and analysts say that it will catalyse competition in the industry.

“We expect the entry of the giant Mauritian sugar Miller, Omnicane, to the Kenya Sugar industry to intensify competition in the market,” said the coverage note.

Kenya has a total installed factory crushing capacity of 30,109 tonnes of cane- per- day which is slightly above Kiscol’s capacity on completion. Omnicane’s experience is also expected to benefit Kiscol.

http://www.businessdailyafrica....26/-/d0veo8/-/index.html

Omnicane is NOT interested in dealing with Mumias Outgrowers. Firms like Omnicane prefer planting on their own land [or large nucleus estates] to manage their supply & quality of cane. The costs of dealing with many [small] outgrowers is not worth the trouble.

I see the price improving why ?

@streetwise,

Mumias Sugar to receive KES 500.0m from Government of Kenya

Mumias Sugar will this week receive KES 500.0m from the Government of Kenya to support its operations. The funds will be used to clear debts owed to sugarcane farmers who have supplied the miller. This aims to support Mumias Sugar’s financial performance which has been subdued by a shortage of raw sugarcane, a decline in ex-factory prices and increased finance costs. The Government of Kenya owns a 20.0% stake in Mumias Sugar. (Source; Daily Nation, Kestrel Research)

Taking money from the government? This is going to be nasty as politicians have a field day.