Presentation on 40th Sugar Industry Strategic Plan Review meeting 02nd & 03rd March 2017

TRANSMARA JOURNEY Started in 2011 with the crushing capacity of 1250 TCD In June 2014- Crushing capacity increased from 1250 to 2000 TCD In Nov. 2015- Expansion of the factory done and capacity increased from 2000 TCD to 4000 TCD. Achieved highest recovery and TC/TS in the region year on year since its inception.

Q1 & Q2 ( 2016-2017) FACTORY & FIELD LEVEL MEASURES

FACTORY MEASURES-CANE MILLED QUARTER 1 ( July 2016 -Sep 2016) Measure Indicator Target Actual Variance July Aug Sep. Cane Milled Tones of cane milled 234,000 228,800 5200 86000 80050 62750 QUARTER 2 ( Oct. 2016 – Dec 2016) Measure Indicator Target Actual Variance Oct. Nov. Dec. Cane Milled Tones of cane milled 234,000 209,200 24,800 80300 76500 52400 The supply of cane was interrupted in the 2nd quarter due to factory maintenance There were cases of cane fire which also affected the harvesting program. The average harvesting ages was brought down to 20 months from 25-26 months

FACTORY MEASURES-TC/TS QUARTER 1 ( July 2016 – Sept. 2016) Measure Indicator Target Actual Variance July Aug. Sept. Recovery (TC/TS) Total Cane: Total sugar 10:1 9.27:1 +0.73 9.31:1 9.32:1 9.16:1 QUARTER 2 ( Oct.2016- Dec.2016) Measure Indicator Target Actual Variance Oct. Nov. Dec. Recovery (TC/TS) Total Cane: Total sugar 10:1 9.76:1 +0.24 9.83:1 9.57:1 9.94:1 1. The reason of good recovery (TC/TS) in the 1st & 2nd quarter was due to available matured cane having high pol varieties like D 8484, KEN 82-472. 2. Minimization of factory losses also contributed greatly to the good recovery.

FACTORY MEASURES-OTE(%) QUARTER 1 ( July 2016- Sept.2016) Measure Indicator Target Actual Variance July Aug. Sept. OTE % 100.0 76.04 -23.96 80.70 75.85 65.34 QUARTER 2 ( Oct. 2016- Dec.2016) Measure Indicator Target Actual Variance Oct. Nov. Dec. OTE % 100.0 61.96 -38.04 71.77 70.10 44.60 The supply of cane was interrupted due to prevailing weather conditions ( during Dec.2016) in relation to the fleet available. The OTE for the Q2 went down because of multiple variables like Engg. Maintenance, festivities & weather conditions in the month of Dec.2016.

FIELD LEVEL MEASURE –AGRICULTURE ( AREA UNDER CANE N/E) QUARTER 1 ( July 2016-Sept.2016) Measure Indicator Target Actual Variance Area Under Cane N/E Hectares 68.64 QUARTER 2 ( Oct 2016-Dec.2016) Measure Indicator Target Actual Variance Area Under Cane N/E Hectares 68.64 There was no variance in area under cane in N/Estate as no new land acquisition was done nor replanting . The plans are under way to lease land for the company nucleus.

FIELD LEVEL MEASURE –AGRICULTURE ( AREA UNDER CANE OUT GROWERS) QUARTER 1 ( July 2016- Sept.2016) Measure Indicator Target Actual Variance July Aug. Sept. Area Under Cane out growers Hectares 17600 16699 901 16542 16565 16698 QUARTER 2 ( Oct. 2016- Dec.2016) Measure Indicator Target Actual Variance Oct. Nov. Dec. Area Under Cane out growers Hectares 17600 17310 290 16730 17002 Farmers continued with self development out of appreciation of timely payments and intensive extension services undertaken during the period. The prevailing weather also catalyzed the continuous development. Currently registration and contracting is continuing in the new region of Kisii & Migori to increase area under cane.

FIELD LEVEL MEASURE –AGRICULTURE ( TOTAL SURFACE AREA UNDER CANE) Indicator Target Actual Variance Total Surface Area Under Cane Hectares 17,600 17310 290 It is anticipated that the area under cane is to be improved. Robust cane development programme is in place to cover both the Narok county and the neighboring Kisii and Migori counties.

FIELD LEVEL MEASURE –AGRICULTURE (PC: RATOON) QUARTER 1 ( July 2016- Sept.2016) Measure Indicator Target Actual July Aug. Sept. Remarks PC : Ratoon Ratio (%) 30:70 28:72 29:71 QUARTER 2 ( Oct. 2016- Dec.2016) Measure Indicator Target Actual Oct. Nov. Dec. Remarks PC : Ratoon Ratio (%) 30:70 18:82 27:73 19:81 1. The pc:ratoon ratio has changed in favour of ratoons. Emphasis has shifted to ratoon maintenance in order to sustain the current good yields. Farmers are being encouraged to embrace ratoon cane maintenance since it has higher returns with low cost of input. 2. Efforts to attain the ideal ratio are underway through continuous robust cane development program like company is providing support system to farmers in terms of fertilizer for planting, providing seed cane and contracting land preparation.

FIELD LEVEL MEASURE –AGRICULTURE (GROWERS YIELD) QUARTER 1 ( July 2016- Sept.2016) Measure Indicator Target Actual July Aug. Sept. Remarks Growers Yield TCH 100 103 105 106 95 QUARTER 2 ( Oct. 2016- Dec.2016) Measure Indicator Target Actual Oct. Nov. Dec. Remarks Growers Yield TCH 100 103 99 We still enjoyed the good growers yield , however efforts are being made to ensure the yield is sustained through introduction of cheap farm level initiatives geared towards productivity improvement like trash blanketing , timely fertilizer application, good husbandry practices.

FIELD LEVEL MEASURE –AGRICULTURE ( PRICE OF CANE) QUARTER 1 ( July 2016- Sept.2016) Measure Indicator Target Actual July Aug. Sept. Remarks Price of Cane Compliance 3100 3450 QUARTER 2 ( Oct. 2016- Dec.2016) Measure Indicator Target Actual Oct. Nov. Dec. Remarks Price of Cane Compliance 3500 3800 1. Transmara still remained with the growers at heart by complaint to the industry requirement of timely payment to the farmers and price well above the industry norms. 2. We are paying our farmers after one week of delivery of cane on weekly basis.

SOCIO – ECONOMIC (FARM ENTERPRISE DIVERSIFICATION) Measure Indicator Target Actual Farm Enterprise Diversification Ratio of area under cane to other enterprises 1:3 Farmers are encouraged through intensive extension services like Barraza's , farm visits and demos to sustain the ratio. Farmers are encouraged to do the diversification to take advantage of the existing opportunities.

AREA OF CONCERN Unavailability of government subsidized fertilizer scheme. We have the issue of cane poaching by other millers like Sukhari There is issue of illegal jaggeries who are also poaching our cane Cane supply at the mill is affected by these poaching and illegal jaggeries within the out growers. Sugar Directorate to endeavour to push for compliance of sugar regulation to bring sanity in the industry, because of lack of regulations there is no legal area assigned for the factories to operate. Zoning to be done for entrepreneur to invest in cane development. The sugar directorate should strive to bring back the sugar development levy which has been scraped since early last year.

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