- Government assures dairy farmers and workers that New KCC’s Sotik factory will remain publicly owned.
- Proposed leasing arrangements aim to improve operations and give farmer-owned entities a greater commercial role.
- Outstanding payments to farmers, suppliers and employees remain under verification as the State plans safeguards for public assets.
Dairy farmers, workers and suppliers linked to the New Kenya Cooperative Creameries (New KCC) factory in Sotik have been assured that the plant will not pass into private hands. The Ministry of Cooperatives and Micro, Small and Medium Enterprises (MSMEs) Development gave the assurance in a statement.
According to the ministry, New KCC will keep ownership of the factory, its machinery and all other assets. Under the proposed restructuring, however, entities owned by farmers would be allowed to run certain commercial operations through leasing arrangements.
The clarification came after Sotik Member of Parliament (MP) Francis Sigei raised concerns about the plant’s future. He also questioned how the changes would affect the people who depend on it for their livelihoods.
In the ministry’s view, the plan will make operations more efficient and give farmers a bigger role in processing and marketing their milk. It is also meant to ease the shortage of working capital at the struggling processor.
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The factory has not been neglected by the exchequer in recent years. Between the 2016/17 and 2020/21 financial years, it received about Ksh 153 million for modernisation. That money paid for new machinery to replace ageing equipment and lifted capacity by 100,000 litres of milk a day.
Even so, New KCC has continued to battle financial and operational problems. Payments have been delayed, processing capacity has gone underused and debts have piled up.
On what is owed to farmers, suppliers, employees and other creditors, the ministry said the figures are still being verified with government agencies, including the National Treasury. It did not, however, state the total amount outstanding or say when the money would be paid.
To guard public property, the Government said it will set safeguards under the leasing model. These will spell out who is responsible for maintenance, inspections and accountability.
By Benedict Aoya
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