The government has committed to clearing over Ksh 250 million in pending bills owed to farmers by New KCC within the next month.
As part of a new payment scheme, farmers will receive half of their dues upon delivery, with the remaining balance settled within two weeks.
This was announced after a meeting between the new management and board members of New KCC and the Cabinet Secretary for Co-operatives, Wycliffe Oparanya, at Lemaiyan Hotel in Naivasha.
The meeting aimed to address the financial struggles of the milk company and chart a path to recovery.
Speaking to the press after the retreat, CS Oparanya acknowledged that New KCC had been incurring losses annually, prompting government intervention.
He expressed concern over the prolonged delays in payments to dairy farmers, noting that these issues would now be resolved.
“We have met with the new board and management to discuss the company’s challenges and outline the way forward,” Oparanya said.
He was optimistic that the milk processor would return to profitability within a year under the new leadership.
“I have instructed the company to ensure that farmers receive half of their payment upon delivery, with the remaining balance cleared within two weeks,” he added.
The CS also ordered a forensic audit of New KCC’s accounts following years of financial losses, despite continued government support.
He emphasized the importance of regular meetings between management and farmers to address and resolve ongoing challenges.
“The new management must implement a new financial model. Additionally, we have engaged the National Youth Service (NYS) to provide security at all New KCC plants across the country,” Oparanya said.
Defending the Sh50 per litre price offered by New KCC, Oparanya called it the highest in the country and urged private companies to follow suit.
Acting Managing Director of New KCC, Samuel Ichura, confirmed that the company owed farmers over Ksh 250 million but assured that plans were underway to clear the outstanding payments in the coming weeks.
“We have already cleared the July arrears and are working on processing the August payments as part of our recovery efforts,” Ichura said.
Chairman of New KCC, David Maina, added that the company was focused on reorganizing its operations to become more efficient and competitive in the market.
