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{
"id": 188845,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/188845/?format=api",
"text_counter": 61,
"type": "speech",
"speaker_name": "Dr. Kuti",
"speaker_title": "The Minister for Livestock Development",
"speaker": {
"id": 60,
"legal_name": "Mohammed Abdi Kuti",
"slug": "mohammed-kuti"
},
"content": " Mr. Speaker, Sir, I beg to reply. (a) In 2006, the Government made a decision to re-open KMC which was under receivership since 1992. The objective of re-opening the factory which has been dormant for the last 15 years was to create a sustainable market for livestock farmers, especially from the Arid and Semi-Arid Lands (ASALs). In order to realise this goal, the Government provided Kshs600 million to clear part of the debt owed to the National Bank of Kenya by the KMC. In addition, the Government has given Kshs1.1 billion towards rehabilitation and operationalization of KMC. After re-opening of the KMC, there have been challenges which have prevented the company from generating profits at themoment. These include:- (i) The KMC factory had been dormant for a period of over 15 years. During this period of dormancy, the facility had depreciated extensively due to lack of maintenance, and machines and equipment had become obsolete and, therefore, a substantial amount of money was required for repairs, maintenance and purchase of new equipment. (ii) The KMC was also re-opened with the objective of processing meat products for the export market and, indeed, the factory had obtained orders from the international market. For example, we had orders from Egypt, United Arab Emirates (UAE), Malaysia, Saudi Arabia and even the Ugandan Army. Unfortunately, before the factory could start exporting its products, there was an outbreak of the Rift valley Fever in 2007, and, therefore, there was a ban on the export of meat from Kenya. The whole country was aware of that problem. (iii) The constraint in penetrating the export market meant that KMC had to contend with the local market which it had been out of, for the last 15 years and the vacuum had been tilted by other abattoirs. It may be difficult for the KMC to effectively penetrate the local market. Therefore, it could not effectively utilise its huge installed capacity, hence it was unable to break even as fast as anticipated. (iv) The post-election violence disrupted the supply of livestock and lowered the demand of meat products. This situation was further aggravated by the subsequent high inflation which increased the cost of operation, thus further eroding the profit margin of the Commission. (v) The recovery process was further frustrated by the then Managing Commissioner, when he misallocated Kshs295 million, which was meant for rehabilitating and operationalizing the Athi River Plant of KMC. He used the money to rehabilitate the Kibarani Plant in Mombasa. 1930 PARLIAMENTARY DEBATES July 17, 2008 (vi) The former Managing Commissioner failed to put in place sound financial management systems which resulted in an estimated expenditure of Kshs300 million, which the KMC could not properly account for. (b) I have here the six months accounts of the KMC. I will table them. It is interesting to note that despite all these difficulties that I have mentioned, KMC, in the past six months, namely, from December, 2007 to May, 2008, had made a profit of Kshs61.9 million, all those hardships notwithstanding."
}