Agricultural firm Sasini Plc reduced its workforce by 1,364 in the year ended September, marking one of the largest job cuts by a Kenyan listed company during the Covid-19 pandemic era. The company ended the period with a total of 2,520 employees across its tea, coffee and other operations. This is down from 3,884 workers in the prior year, according to disclosures in the Nairobi Securities Exchange-listed firm’s latest annual report. It was not immediately clear how many of the employees were on short-term contracts and how much the firm spent in retrenchment costs. The downsizing came despite improved sales and profitability, indicating that the company has taken a proactive step to cut costs in anticipation of weaker earnings growth as the pandemic lingers on. Sales rallied 48.3 per cent to Sh4.1 billion in the review period compared to Sh2.7 billion a year earlier. This contributed to the company’s net profit of Sh12.6 million, reversing a net loss of Sh337.7 million recorded the year before. Most of the job cuts were witnessed at the tea estates where the number of staff declined by 930 to close at 1,683. Other operations of the company saw the head count fall by 258 to 80 while the workforce at the coffee division shrank by 176 to 757. Pre-tax profit Tea was the least profitable division, with its loss before tax widening to Sh66.5 million from Sh35.3 million. Coffee posted the largest pre-tax profit of Sh79.3 million, reversing a pre-tax loss of Sh223.2 million. Other operations recorded a profit before tax of Sh21.5 million, reversing a pre-tax loss of Sh133.5 million. Sasini says the pandemic hurt some of its operations, adding that it is keen on cutting costs going forward. “In our tea business, we will entrench our automation project to help deliver profits derived from reduced costs of production,” the firm’s chairman, James McFie, says in the report. “In the months and years ahead, and once we finish with automation in the field, it is our intention to initiate and enhance automation in the factories as well. “All these will be benchmarked on the crucial need for the business to find cleaner, simpler and more affordable ways of conducting its business.” Sasini’s macadamia business suffered the most from the pandemic as lockdowns and restrictions in most parts of the world disrupted the retail, aviation and hospitality industries through which most of the snacks are sold. The company shut down its macadamia factory and focused on processing the nuts that had already been harvested by the time the pandemic broke. “We expect this business to pick up very slowly in the future as the anticipated effects of the pandemic continue to affect the general nuts business negatively and especially in the hospitality and travel industries,” Dr McFie says. The pandemic triggered a steep plunge in Kenya’s economic activities last year with key drivers such as accommodation and food services, education, taxes on products as well as transportation and storage all reporting contraction.
Source: Business Daily