Kenya Meat Commission said in 2018 that it needed Sh822 million to keep operating as low production and rising unpaid bills pushed the state-owned processor closer to closure.
Agriculture Cabinet Secretary Mwangi Kiunjuri told the National Assembly’s Agriculture and Livestock Committee that the money would go to farmers’ dues, renovations and debt settlement.
He said the commission had continued to post losses over the years. For the year to June, it recorded a net loss of Sh228.1 million, an improvement from the Sh309.2 million loss posted a year earlier.
Kiunjuri said the company’s difficulties dated back to the 1960s and were linked to political interference, obsolete machinery and the loss of the European Union market after animal disease concerns.
He told MPs that some of the equipment was up to 70 years old and still manually operated, which increased labour costs and slowed production.
The Cabinet Secretary also pointed to unreliable raw material supplies and frequent plant breakdowns as factors that had reduced efficiency. He said livestock farmers had lost confidence in the plant and were unwilling to supply it, deepening the crisis.
The commission owed farmers Sh228 million.
Kiunjuri said KMC needed production capacity of 10,000, or 330 cows a day, to meet about Sh19.8 million in monthly overheads. He said current output stood at 100 cows a week.
The Treasury cut the Sh500 million that had been set aside for machinery repairs in the financial year as the government moved to implement austerity measures.
At the time of the review, KMC had already signed a contract with Turkish firm Sanet Veet Industrial to upgrade its Athi River plant. An initial Sh125 million had been released for the work.
