Effects on Conflicts of Sugar Production at Nzoia Sugar Company
NZOIA Sugar Company Limited is engage in the production and sales of sugar in Bungoma town of western province in Kenya. The Company serves more than 45,000 farmers in its large community for this province. It was established in August 1975 and the government holds a large majority share of this company. NZOI is one of the largest sugar producers in Kenya consisting of an initial milling capacity of 2000 tons daily during 1989 and continue to expand per year to a production of 78.000 Metric tons of brown sugar. Their sugar consist of different prices and class available ranging from standard 1kg, 2kg, 5kg, 10kg to 25 and 50 kg. As of today they are producing variety of sugar so that the company can be more competitive and versatile production company that will undertake sufficiency and stability in its targeted objectives.
Currently this company has been engage in the controversy of the acquisition of the machine crystallizer that has allegedly compromise the production flow of NZOIA Sugar Limited that is not a part of their plan. The local workers union has questioned such purchase that is not healthy to the production flow. While on the side of the Chairman of the board Julius Nyaroso denied the fact that the company is engage in the contracting of the wrong machine that is worth an unbelievable amount of about 54 million shilling. Nyoroso said that the ongoing project is a sugar monotube drier that needed in the company. But the engineer reveals that the machine has not produce the right amount and it only produce 38 to 40 percent while the recommended machine should produce at least 50 to 56 percent production. According to some engineers this machine has created a lost variable downtime production that will definitely decrease the sugar output and definitely increase the amount of work needed to target its quota. The production is about 3500 tons the purchase of a real crystallizer should produce at least about 4000 tons and there are at least 80 tons spillage of sugar using the crystallizer.
The union therefore questioned the chairman what has been going on. Will they become a sugar producer or a supplier of the machine? They have decided to report such matter to the anti graft and corruption commission to investigate on such cases. Then they added that the machine will definitely lose its momentum on the market since the machine is not viable and there may be a scarce in the production. They have demanded that the board will act an immediate response to such case since the entirety of the company and employee’s welfare is at stake here. They even ask the supplier to replace the right machine at its own cost since they have not delivered the right one. Others find it confusing that Chairman Julius Nyoroso is accepting such facts that the machine is unviable and obsolete while they have been paying such amount.
The amount find to believe that if this will continue the amount of production decrease so as the workers workload will increase and they all suffer from the low sales because of low production if this will continue to happen the company cannot withstand its profit that will lead to retrenchment of the workers, and that the worst scenario will be the closure of the company. Some engineers and workers are asking where does the money go? There are new machines that do not account or do not equal to the amount tendered to the supplier and its performance is questionable.
On the other reports by Bloomberg network there are many sugar companies in Kenya that has been reported to push through by the government to be privatized. Including the five sugar companies earmarked for sale are Nzoia Sugar Company Limited, Miwani Sugar Company, Sony Sugar Outgrowers Company, Chemilil Sugar Company and Muhoroni Sugar Company. According to the Secretary of Agriculture Dr. Romano Kiome that the privatization of such companies will increase productivity this companies should be privatized and maintain accordingly to create such competitive advantage in the regional market. But workers definitely are not going to allow such ideas but the government has a steady plan on how to do it until 2012. Privatization Commission Executive Director and CEO Mr. Solomon Kitungu has announced that this proposal have been approved already by the Cabinet since last year.
Credit:ivythesis.typepad.com
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