Labour costs keep sugar prices high

Most sugar millers in Kenya will take longer than expected to be competitive inside the Comesa trading bloc.

This is despite the extension of a safeguard on sugar imports form Comesa member states to four years.

Mumias Sugar Company human resources manager, Mr Edwin Muruka said on Wednesday that the industry still faces a host of challenges.

He singled out the high cost of production and the expensive labour inputs that make producing sugar locally an expensive business. Citing a case study in Malawi, where he said the cost of manufacturing one tonne of sugar was Sh2,800, compared to Sh50,000 for Kenya, Mr Muruka said this difference has to be addressed first.

“Kenya is the most expensive nation in terms of labour within the Comesa region, yet we expect to be at par with other trading blocs.”

Speaking during a ceremony to award long serving workers of the company, Mr Muruka said the labour market had scared off players in other sectors, including the flower industry. In Malawi, he argued, the cost of labour is competitive, with sugar cane cutters being paid only a third of what their Kenyan counterparts pocket.

However, Mumias has developed enough to compete effectively in international markets.

The official cited the company’s power project, which was recently inaugurated by President Kibaki, and the Tarda multi-billion sugar projects, as milestones for the sugar miller.

“We sympathise with other sugar firms because at Mumias, we have made great strides towards bracing for competition on the international scene. But many other companies are yet to start operating efficiently to compete favourably,” he added.