New Kenya Co-operative Creameries (new KCC) procured 87 million litres of raw milk in the year ended 30 June 2025, paid farmers an average of KSh 53.45 per litre, and disbursed more than KSh 4.50 billion in farmer payouts.
- •Despite this, it still posted a KSh 953 million net loss, drew KSh 2.40 billion in government grants, more than its KSh 1.44 billion pre-tax loss, and received a going concern warning for the fourth consecutive year.
- •The deterioration predates the revenue decline: The last meaningful pre-tax profit on record was FY2020 when it made KSh 95 million on KSh 8.79 billion in revenue, with a 30.3% gross margin.
- •By FY2021 revenue had risen to KSh 9.46 billion, the highest in the available record, yet pre-tax profit had collapsed to KSh 2.7 million and gross margin had already fallen to 26.6%.
Since that peak, revenue has fallen 22% to KSh 7.35 billion. Four consecutive pre-tax losses have totalled KSh 4.26 billion. Gross margin declined from 26.6% in FY2021 to 5.4% in FY2024 as cost of sales reached 94.6% of revenue, before a partial recovery to 15.4% in FY2025.
Cumulative government capital grants over five years stand at KSh 4.55 billion: KSh 50 million in FY2022, KSh 1.50 billion in FY2024, KSh 2.40 billion in FY2025. The grants needed to keep the company alive are growing faster than the losses they cover.
Whether the company will be privatized, restructured, or neither is unresolved.
Finance costs nearly doubled to KSh 369 million in FY2025 from KSh 192 million in FY2024. Finance costs now consume 32% of gross profit. Trade payables reached KSh 3.98 billion with KSh 3.24 billion, or 81%, overdue beyond 120 days. In FY2023 the overdue figure was KSh 363 million growing ninefold in two years. Net cash was negative KSh 248 million.
A balance sheet with a KSh 3.17 billion hole
The Auditor-General issued yet another qualified opinion, flagging a KSh 3.17 billion milk mop-up reserve in equity with no corresponding cash asset. Payment records show the funds were disbursed to farmers but the cash does not exist on the balance sheet. Eleven prior-year issues remain unresolved.
Billions spent, volume target never met
New KCC has collected between 82 and 87 million litres annually for five consecutive years against a standing budget target of 120 to 122 million litres, achieving just 68-72% of target every year. Factory commissionings, a KSh 5 billion infrastructure commitment, and a presidential KSh 50 per litre price directive have produced no volume growth.
By November 2025, Rift Valley farmers were owed KSh 300 million for four months of deliveries while government agencies including the Ministry of Defense, Administration Police Service, and State House collectively owing New KCC KSh 184.3 million it had not recovered.
CS Oparanya announced in November 2025 that the government was working on a privatization programme for New KCC to resolve the farmer payment crisis. Rift Valley farmers rejected outright sale, demanding the government's ownership stake be converted into farmer-controlled shares instead.
Within weeks, former Co-operatives CS Simon Chelugui contradicted Oparanya, stating a Cabinet resolution of 29 March 2019 had explicitly excluded New KCC from privatization and remained in force. Whether the company will be privatized, restructured, or neither is unresolved.
