Eight Coffee Factories Risk Auction Over Ksh 163 Million Debt

Kevin Namunwa | Sep 29, 2020

Eight coffee factories affiliated to the Rumukia Cooperative Society in Nyeri are on the verge of being auctioned because of a Ksh 163 million debt burden.

The debt dates back to the 2013/14 financial year when a miller owed the society more than KSh74 million for cherry and mbuni (unwashed produce). The society, on the other hand, owed farmers more than Ksh 85 million.

Instead of remitting the money to the society for payments, Kenya Cooperative Coffee Exporters (KCCE) paid creditors (Sasini) Ksh 48 million and Kenya Cooperative Coffee Mills (KCCM) Ksh 25 million, leaving the farmers with nothing.

In the 2016/17 financial year, Cooperative Bank recovered KSh34 million Stabex funds from the society, pushing it further into borrowing.

The society was hence forced to dive into further borrowing to get money to pay farmers for their produce.

The society borrowed from Taifa Sacco year after year, which has accumulated to millions of shillings.

Taifa Sacco, through Green Bell Auctioneers, seeks to reclaim farmers’ assets in all the factories under the cooperative to offset the debts that have pushed it to its knees. Consequently, the auctioneers have been instructed to cart away parchment worth KSh16 million, a KSh400, 000 weighing machine, a pulping machine and other office equipment that cost about KSh1.2 million.

Meanwhile, the Capital Markets Authority(CMA) is in the process of taking over and fully automating all marketing and auction processes at the Nairobi Coffee Exchange(NCE).

The spot market should be in place by April 2021. Figures indicate that Kenya sells a large bulk of its coffee or 95% to overseas buyers through the NCE. The remaining portion is sold to foreign buyers through a direct market.

‘Virus Profiteering’ Running Rampant In Kenya

Albert Einstein once said, “In the midst of every crisis, lies great opportunity”. Unfortunately, the opportunities available are not always in the best interests of the public. Case an...