Cash-strapped Kenya Meat Commission (KMC) sold products worth Sh127.5 million in the nine months ended March as it continues to operate below capacity.
The government-owned meat processor is grappling with an unreliable supply of raw materials and an ageing plant, which have slowed down its operations.
Its debts stand at Sh1.1 billion, which include livestock farmers’ dues of Sh254.4 million and outstanding payroll deductions totalling Sh144 million.
Agriculture Chief Administrative Secretary Andrew Tuimur said part of the debt that the KMC owes the government is Sh300 million.
“The credit policy has been reviewed and its implementation will go a long way to avert commutation of huge debts and bills owed to us by creditors,” he told the National Assembly Agriculture and Livestock Committee.
Failure to pay livestock farmers has disrupted KMC’s supplies making it operate below capacity.
The Athi River plant slaughters 200 cattle per week, despite it having the capacity to process the same number of animals per day.
Between July and March, the commission slaughtered 2,770 cattle and produced 1,714 bags of meat and bone meal.
Among its customers are government institutions such as the Kenya Wildlife Service, Kenyatta National Hospital, universities, schools and colleges.
The KMC also supplies supermarket chains, including Tuskys and Uchumi.
The firm has grappled with poor performance since the 1960s because of political interference, obsolete machinery, and loss of the European Union market due to animal diseases.
The parastatal has fixed operating costs of Sh20 million per month including Sh10 million for salaries and Sh4 million for electricity.