CPA Makokha Wanjala is the new Managing director of Nzoia Sugar Company Limited. He has vowed to turn around the giant manufacturer and in the process save over 1000 jobs. Besides outdated manufacturing technologies and high costs of power, he identifies lack or raw material as the biggest challenge facing the industry. Kenya Engineer Team joined him on the fourth volunteer cane planting exercise, a Rapid Results Initiative he has deployed to achieve his goal number one; To put all arable land owned by the company under sugarcane….
Who is CPA Makokha Wanjala?
|I’m an accountant by profession. Before I came to Nzoia Sugar I was serving the profession at the Institute of Certified Public Accountants of Kenya as the senior training manager. I clocked nine years there. Before then I was at the university of Nairobi and before then I was at the FORD foundation. Academically I hold an MBA, a Bachelor of Commerce and I have done a number of short term courses around strategic planning, ISO, Performance Contracting and others that enrich my core profession to then prepare me for a position in leadership.|
What is your Overall role at Nzoia?
As the team leader at Nzoia Sugar Company is to be the first among equals. I’m supported by a team of 14 managers covering various disciplines in the value chain for production of Sugar and the other by-products that we produce. Experience wise, while this is my very first tenure at a manufacturing enterprise I have had considerable leadership experience with a track record in people management and I consider the core of management to be more or less the similar because as a leader all you have to do is to deploy the resources that are available to you for the best output. And the resources here being people, time, money, Infrastructure and the natural resources that you find in place. Like in this case we have a serious network of farmers, we have a nucleus and we have other stake holders. So my role as a team leader is to provide a balance in the interaction of various stake holders putting my eye on the overall goal of the organization which is to turn this enterprise into a blue-chip company.
What products does Nzoia Offer the market?
Nzoia is an Agricultural complex with a number of products that we offer the market. We have traditionally been known for sugar and we produce and package our sugar in packages of 50KGs, 25kgs, 10 kgs, 5kgs, 2kgs, 1kg, 0.5kg and 0.25kg good quality clean brown sugar. We also sell molasses which is a byproduct in the sugar production process. We also sell bagasse, another output in the sugar production process. Like I said, we are largely known for growing sugar but we have also in the recent past gone into growing Soya and it is our intention to continue diversifying. So you will see a little bit coming out of Nzoia other than just sugar.
We also have a very extensive forest network, we have supported our government towards the 10% forest cover, largely exotic trees but also indigenous trees. And a number of those exotic trees once they are mature we are able to retail them. We also have a guest house, perhaps one of the most serene environments that one can get within Bungoma County with a capacity to host conferences and provide accommodation for those who may want to sleep over. As a unit we also have our four schools, two primary schools and two secondary schools as part of our ecosystem so in a small measure we also provide education. We do have our company hospital which has now been signed up and accredited by the National Hospital Insurance Fund hence being able to provide medical care for our staff and for the immediate community around us. As a responsible corporate citizen we also provide firefighting services so should there be an emergency anywhere we are able to stand with our community and provide that service. We also do road paving and maintenance. We have adequate infrastructure and skilled personnel. We do this both within our nucleus and the surrounding areas and more often we are called upon by the county government to lend them a helping hand in paving of the marram roads in the county.
What are the specific challenges being faced by Nzoia Sugar company in comparison to the overall challenges the sugar industry faces in the country?
I would summarize that perhaps in my view the biggest challenge that the company faces is that of leadership. A challenge of helping to connect the various dots and pieces together to ensure we are able to move together both in harmony and also slightly faster. Nzoia Sugar is a jewel. I have been here for now two months and five days of my 1000 days’ contract. In my short stay at this enterprise I have come to the conclusion that like every other institution we have gone through a myriad of challenges but luckily for us we have a resource base which if we actively engage and deploy it should be easier for us to turn around. You may know of the point we keep emphasizing that we have the largest nucleus, we have some of the best agricultural machinery most of them in very good use and quite a number of them which we need to get back to functioning state.
As an industry we have a challenge of raw material and this has been occasioned by quite a number of millers that have come up without an increase of farmers that are contracted for cane growing but also this has been made worse by the continued explosion of population that leads to fragmentation of land that would otherwise be available for Agriculture.
This has then created a scramble for the little available raw material and it is a scramble that Nzoia Sugar is ready to participate in very effectively.
We also have a challenge of regulation and I’m happy that His Excellency the president through the relevant ministry, put together a task force and proposals have come up in terms of how we can bring some sanity and balance in the industry.
With these challenges in mind how important is diversification as earlier mentioned?
For Nzoia Sugar diversification is very key. We have 24,000 acres of arable land. When I came in there was about 2,700 acres under cane. That tells you we have an opportunity to put our land either under cane or under any other crop. But from where I sit the importance of diversification hinges on the fact that cane itself is a 14 months’ crop using the fast maturing varieties that we have deployed. That means that through diversification you can provide/create shorter period revenue streams as you await to harvest your cane. But also with the machinery and resources we hold we have potential to do well in most other farming areas so we sit on an advantage and we intend to explore this advantage to the maximum hence our reasons to consider a number of these ideas. But I must emphasize that at the core we will remain a sugar manufacturing enterprise.
Tell us about the cane planting activities on the Thursdays as part of your efforts to generate raw resources. …
So I have mobilized my colleagues, members of staff, the institutions around us and our immediate community to join us in our fourth volunteer can planting day. We conceived this idea of volunteer cane planting day when we realized that we have sufficient surface that is fallow and yet we can put it to productive use. So cumulatively we have done a total of 171 acres and we intend to continue this exercise every Thursday until we cover much of the land that is fallow. This doesn’t mean that we have given up on our farmers. As we do this, we simultaneously continue to support our farmers through hallowing and fallowing and provision of seed cane because the nucleus at its best will give us just 30-40% of our demand and the remaining has to come from our out grower farmers network.
What do you plan to achieve within the 1000 days of your contract?
I have about four bullet points that I’m keen on in my tenure;
The first is cane development. We are currently running a volunteer Rapid Results Initiative on cane development so in the 1000 days I will ensure that I have put all our arable land under good quality cane. Related to that, I have an out grower network of 43,000 farmers. I intend to engage them with an objective of increasing the surface under which cane is grown to the point where I’m able to crush cane at an optimum capacity.
The second is on stakeholder management. We have had challenges on how we have managed our farmers, our suppliers, County & National Government leadership and other stakeholders. My second priority is therefore to create a harmony and balance on how I manage the various stakeholders so that this enterprise achieves its intended objective.
The third is to keep this company clean. So anything that we don’t need we set it aside, and if we can dispose we dispose, anywhere we are supposed to paint we are painting. So I will definitely leave this company cleaner than I found it.
Lastly is to turn this company back to profitability. You may be aware that we’ve had challenges in the recent past with regards to servicing our obligations. This is a situation that we are all working to turn around through the support of both the county and national governments.
How is it possible that imported sugar on our shelves is cheaper than locally produced sugar?
As a country and as a people we owe it to ourselves to buy Kenya, Build Kenya. It is true that our cost of production is high and there are quite a number of drivers that make this cost this high. One of which is cost of power the other is the technology we have deployed but to another extend also is just the way we do our business. There are various cost saving mechanisms that perhaps we have not exploited.
We also have a challenge in terms of the varieties of cane we grow in this country. But as a country we may even want to look at if the millers have done all they can do and the cost of production is parallel or slightly higher then perhaps we need to think about restrictions because some of these things are about strategic interest of a nation. We can’t let our farmers be as poor as they are just because someone is able to produce sugar elsewhere at a cheaper rate. But as I say so those of us who sit in this positions must ensure that we are able to get our KG of sugar on the shelves at the lowest possible price.
How are we addressing the issues of outdated technology and the cost of power?
From the onset I must say that our government is very keen on addressing the power issues. We have seen some efforts at the governmental level to ensure that those of us who consume power as we do are given some favorable rates which is a process that makes us happy to see the state make those efforts. Internally we have carried out several energy audits and we are also able to generate a bit of our own power to reduce the amount we draw from the grid. So the issue of power has to be addressed at two levels; Internally we do the best we can through Co-gen but externally we hope that the government is able to address the issue of the cost of power because it is a significant cost in the production process.
What is your take on proposed privatization of state owned sugar mills?
In my opinion, without seeming to comment on ongoing processes at the privatization commission, I think any process or anyone that can infuse additional resources, new technology and or speed up the processes I would be happy to welcome such efforts.
What is the future for young Engineers in a plant like this?
I see a lot of potential and value for kenyan engineers for instant a lot of decisions I make here I have to rely on the expertise and advise from my engineers at the engineering department.
I think I’m the largest employer of Engineers in this region and I’m happy with the kind of technical support they continue to provide. There are quite a number of innovations that our colleagues from the engineering department have come up with that allow us to either speed up the process or reduce the costs or shorten certain processes in the system without compromising the quality of the final product. We have an engaging program where we uptake the young engineers and give them hands on experience so that they are prepared for the market.
But I also want to challenge engineers in the country that there is more they can do. We are seeing a trend towards smaller factories and or containerized solutions. So there is opportunity in there for our engineers to help us leapfrog from the current technology to newer more efficient technologies.
What have you observed as challenges faced by Engineers in the country or at your company?
Generally as a country because of our preference for foreign produced items we suppress our manufacturing ability and that then buries quite a number of engineering jobs. Everytime you buy a foreign item then you have sustained an Engineer in a different country. I’m happy because manufacturing is one of the big four so if we address the component of manufacturing well then I see quite a number of opportunities sprouting up for the profession.
I would also say that Engineering teaching institutions need to work with the enterprises so that graduate engineers are all round people and that is a challenge that is shared by all the professions.
How do we build local capacity to avoid overdependence on foreign solutions?
There are two levels to do this. The first level is the Kenya Consumer. The kenyan consumer has to be told to always pick the kenyan product from the shelves. Of course the challenge back to us as producers is to ensure that we are putting out products that are comparable to anything produced anywhere else in the world. But there is also an opportunity in how we train people in the engineering profession. As an institution we have close partnerships with neighboring universities. And also as I take up to train the student Engineer, I’m also limited to the current technology that I have deployed.