Government rules out sale of New KCC Sotik factory

Nairobi, Kenya – The government has dismissed the prospect of selling the New KCC Sotik factory to private investors, stating that restructuring efforts will maintain public ownership while permitting farmer-led entities to oversee certain commercial activities. The Ministry of Cooperatives and Micro, Small, and Medium Enterprises Development announced that New KCC will retain ownership of the factory, machinery, and other assets under the proposed leasing schemes.

This clarification came in response to concerns raised by Sotik MP Francis Sigei regarding the factory's future and the implications of the changes for dairy farmers, workers, and suppliers.

The government explains that the restructuring aims to enhance operations, boost farmer involvement in milk processing and marketing, and alleviate working capital difficulties at the state-owned processor. The Sotik factory was granted approximately Sh153 million for modernization between the 2016/17 and 2020/21 fiscal years. This investment entailed replacing obsolete machinery and increasing processing capacity by 100,000 liters of milk per day daily.

New KCC has encountered financial and operational hurdles, such as delayed payments, underused processing capacity, and mounting debts. The ministry is currently verifying outstanding payments to farmers, suppliers, employees, and other creditors in collaboration with relevant government agencies, including the National Treasury.

However, the exact total amount owed or the timeline for payment disbursement remains undisclosed. The government assures that safeguards will be implemented to safeguard public assets and clearly define duties for maintenance, inspections, and accountability under the proposed arrangement.