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Mumias Sugar Farmers
Rank: Elder Joined: 6/27/2008 Posts: 4,114
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Some MPigs lead farmers to protest against Kidero...shouting 'Kidero must go!' It turns out that the MPigs do to have sugar farms nor are they MSC shareholders. What is really going on? I thought this is a free country,if you don't like the price MSC is offering,take your cane to SONY,or another company! BTW,MSC is the only one that pays on time! Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Mukiha, Most 'cane farmers' have a contract with parent sugar co and therefore cannot deliver this cane to any other sugar factory.It goes that the company provides everything from ploughing,harrowing,seeds,weeding,cutting,transport and weighing.........Am always tempted never to refer to this people as farmers......They lease land..........The only different scenario being in West Kenya Sugar.......Si ni ukweli SimonKabz?..... Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Elder Joined: 6/19/2008 Posts: 4,268
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@Njung'e
So,what do the 'farmers' actually do? Am tempted to look for that contract.....
Some deals are like glass. Sometimes it's better to leave them broken than try to hurt yourself putting it back together.
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Wendz, What do they do?.......Sit and wait with the exception of a few who are reffered to as private cane farmers.This latter group does far much better than the former.Leaders from sugarcane growing areas should be busy showing this 'farmers' the way out of their miseries and until then,they will remain just that.......Poor Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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70% of cost of sugar is from cane. If Mumias dies coz of paying high cane prices,then we will end up with 'cheaper' sugar from Swaziland,Sudan,India,Malawi,etc. Then by 2012 there will be no firm/Mumias to buy their sugarcane. Well,they can eat their sugarcane 24/7. If they do not want the current price for their cane,then they should NOT have signed contracts with Mumias. They should grow something else. In Kenya,people don't want to fulfill the mandates as regards contracts. If you think Mumias underpays for cane,then do NOT plant sugarcane. Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/15/2006 Posts: 41
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ok. interesting info 'farmers' and company interlocked. but then the landowners can have other (allowing for creativeity) options of planting something else-i shudder to think options available for mumias. really God save longterm investor.
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Rank: Member Joined: 8/18/2006 Posts: 8
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it's been a while since i commented on SK. this is the thing with MSC
what's going on is that there are many more challenges than price. it's also taking much longer before cane is picked up after maturing and even longer for cane farmers to get their money after delivery.
the acerage is going down right now,simply because the area is gradually getting over populated but mainly because people are fed up with all the issues and are uprooting the cane for other alternative crops.
don't be fooled by how attractive the 'contracts' are; yes the company will take care of ploughing,harrowing,fertilizer,seeds,cutting,transport and weighing,but not planting and weeding (its not a fun job) which you will have to do by yourself.
the mess really starts when they are supposed to harvest the cane,which they never do ontime nowadays,meaning farmers are losing because everyday the cane goes without being cut after maturity,farmers lose because the weight reduces over time.
in addition,there's no incentive to change the payment method to pay by sugar content for farmers who can achieve good quality cane,meaning those who don't sell their fertiliser!
in short the profits have diminished over the years and MSC desparately needs a new direction. am not surprised that they want Kidero out.
Investing in stocks without doing the homework that lets you arrive at a fair estimate of the value of business it represents,is like buying a house without ever having stepped inside.
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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1) Farmers have objected to sucrose based payments.... 2) MSC can't be blamed for 'over-population'. Perhaps MSC should distribute condoms. One free rubber for every kilo of cane.... 3) Farmers sell the fertiliser. This has been a major problem. Then they don't grow enough to repay the loans.... 4) MSC wants Tana Delta coz they want to grow their own quality (high-yielding) cane... Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Swaka, You would know.A favourite cane variety of 'farmers' in the west sugar belt is known as 'NIgeria'.Even at 36 months it still retains it's weight.Current lead time for unharvested cane is 19.5 months.Well inside the maximum of 24 and payment for contract cane is 5 working days and 2 days for private cane.Try coffee.........and BTW,ain't the entire circus a tribal thing???.I have heard things like 'kidero must go.'....'Omunyolo tawe'.(No to a Luo)....Omunyolo is Luhya derogatory for a Luo.........eh?... Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Member Joined: 8/18/2006 Posts: 8
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Vitu,I totally agree with you. MSC is not entirely to blame. condom or no condom acerage under cane will continue to fall,if MSC doesn't get Tarda or acquire other companies within the region. Then there really is no longevity in their model.
Njunge,it's not really about the 'omunyolo' syndrome,profitability has been shrinking over the years and the farmers are feeling the pressure hence the Kidero must go chanting.
Political interference didn't help because it only put pressure on MSC profitability,which I don't see improving soon until they make an acquisition or Tarda materializes.
Realistically speaking,where is MSC going to be in 5 to 10 years if they don't expand? Yes they did diversify but what use will it be if they don't have the material to meet optimal production levels.
Investing in stocks without doing the homework that lets you arrive at a fair estimate of the value of business it represents,is like buying a house without ever having stepped inside.
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Rank: Member Joined: 8/18/2006 Posts: 8
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Njunge - harvesting continues to be a serious problem,has been for the past few years. there's even cases of 36 months,the uprooting of cane by farmers is out of all this frustration.
Payment is not any better with agonizing waits that sometimes go beyond 90 days. A few years back I used to defend the MSC business model with a passion. I still hold their stock,but until they pull off a major acquisition soon or expand via Tarda where their cost of production will be much lower,I will only buy more for speculative purposes.
The costs in the western region will continue to grow,since 'we' continue to subdivide land making it more difficult to work the land and also gradually diminishing the acerage. - that's a factor beyond Kidero's control.
We however have not forgotten what MSC has brought to the region in terms of infrastructure and improving livelihoods over the years,destroying some because windfalls have a way of doing that sometimes.
Interestingly,we go to MSC to get our calves'ng'ombe ya grady' after uprooting 'our' cane. We also applauded Kidero when we got bonus shares and bought MSC shares at a discount.
But right now when profits have consistently declined over the years,and with all the operation deficiencies especially at harvest time and payment time,they will always sing 'Kitero mpaka itsie!' - Kidero Must Go.
Investing in stocks without doing the homework that lets you arrive at a fair estimate of the value of business it represents,is like buying a house without ever having stepped inside.
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Rank: Member Joined: 9/23/2008 Posts: 8
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let whoever feels that cane farming is a loss uproot his cane and life continues MSC should not go the way of other sugar factories because of massaging egos of wayward proponents of socialism.
Luda
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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I agree. Do not sell to MSC or grow cane since it is a free choice!!! Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Swaka, Your allegations about cane harvesting and payment is without the most basic facts.I guess you are confusing MSC and it's neighbour,Nzoia........as VVS and Luda has put it,there is no gun on the so called farmers to grow cane on behalf of Mumias.......If they are smart and hardworking enuff,let them uproot the cane and grow whatever they feel is more profitable.Why the noise?.......Finally,this still does not tell why the 'farmers have taken to burning MSC nucleus cane........It has nothing to do with them.Simply said,the intention lies elsewhere and as i suggested earlier,it is tribal ( Omunyolo tawe ) politics at play............. Guka wa bijuti... Nothing great was ever achieved without enthusiasm.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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With the excellent results announced last week, I wonder whether the MPigs will organise another "Kidero Must Go" demo... Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi
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MPigs will organize anything to gain populism... Most Mumias shareholders do not live in Nyanza/Western whereas the farmers (who the MPigs are courting) do... so votes count!!! Lakini, to get rid of Kidero... it would have to a major effort on the MPigs part coz majority shareholding seem happy with him. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 7/7/2009 Posts: 111
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Wish i was a cane farmer. They may make a kill more faster than us in the NSE ... Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it...
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