Unpaid dues and uncertainty over the future of dairy operations in Sotik have put the proposed restructuring of New Kenya Co-operative Creameries (KCC) under scrutiny, with the Government now ruling out the sale of the factory to private investors.
The Ministry of Cooperatives and Micro, Small and Medium Enterprises Development says the factory’s ownership will remain with New KCC, even as farmer-owned organisations are allowed to take up some commercial operations under proposed leasing arrangements.
The announcement addresses concerns among farmers who depend on the facility to sell their milk, as well as employees and suppliers awaiting payment.
Sotik MP Francis Sigei had sought answers from Parliament’s Agriculture and Livestock Committee on the proposed changes, including their objectives, implementation timeline and possible effects on the local dairy industry.
He also called for an audit of outstanding liabilities and clarification on how public assets would be protected during any management transition.
Farmers await clarity on payments
The Ministry says payments owed to farmers, employees, suppliers and other creditors are being verified in consultation with government agencies, including the National Treasury. However, it has not disclosed the total outstanding amount or given a date for settling the arrears.
The issue is significant for farmers who rely on New KCC as a market for their milk. Delayed payments can affect their ability to buy animal feed, meet veterinary costs and maintain regular production.
Sigei has also raised concerns about statutory deductions reportedly not remitted since June 2026, calling for greater accountability over the factory’s obligations.
The Government says safeguards will be established to protect the plant’s machinery and other assets, with clear responsibilities for maintenance, inspections and accountability under the proposed arrangement.
New KCC was established in 1925 as Kenya Co-operative Creameries and rebranded in 2005. It remains a state-owned dairy processor that buys milk, processes dairy products and provides a market for producers.
Modernisation of investment under scrutiny
The Sotik plant received approximately Ksh 153 million for modernisation between the 2016/17 and 2020/21 financial years. The investment included replacing ageing machinery and expanding processing capacity by 100,000 litres of milk daily.
Despite the investment, New KCC has struggled with financial constraints, delayed payments and processing capacity that has not been fully utilised.
The restructuring is intended to improve efficiency, increase farmer participation in processing and marketing, and ease working capital pressures.
The Government has not provided detailed terms of the proposed leasing arrangements, including which farmer-owned entities may participate or how commercial responsibilities will be allocated.
Those details will be important in determining whether the changes improve operations without compromising public assets or the interests of farmers.
For Sotik’s dairy community, the immediate concerns remain the settlement of outstanding dues, reliable milk markets and clarity on how the factory will be managed. The success of the restructuring will depend on whether it addresses these problems while preserving public ownership.
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