Cash-strapped KMC to retrench 165 workers in cost cutting plan

Politics and policy

The local unit is currently trading about Sh95 to the dollar compared to about Sh90 at the beginning of the year. PHOTO | FILE 

By NEVILLE OTUKI

In Summary

• The meat processor is expected to reduce its workforce from the current 465 staff to 300 as the government prepares to build a new plant after dropping plans to revamp the existing ageing abattoir.

Struggling Kenya Meat Commission (KMC) will retrench 165 staff to cut costs following an audit meant to restructure the loss-making processor whose workers are on strike over poor pay.

Acting managing commissioner James Tendwa said yesterday that the board would implement the Kenya School of Government recommendation on job cuts — a decision that has previously resulted in lawsuits.

The meat processor is expected to reduce its workforce from the current 465 staff to 300 as the government prepares to build a new plant after dropping plans to revamp the existing ageing abattoir.

“The trimming of our bloated workforce is part of our turnaround strategy,” Mr Tendwa told the parliamentary Public Investment Committee on Tuesday.

The new factory will cost Sh1 billion ($11 million) and a tender has been issued to a South African firm. The revamping of the current plant would have cost Sh3.1 billion ($33 million).

READ: KMC boss on the spot over Sh1bn tender

ALSO READ: SA firm wins tender to build new Athi River abattoir

The Treasury had allocated Sh700 million for the revival of the ailing Athi River-based factory. However, part of this money together with Sh600 million budgeted for in the next financial year starting July will now be spent on the new plant.

The State-backed abattoir has reduced its board size to six members from 10 in its cost-cutting plans as the firm struggles to return to profit.

Mr Tendwa said the firm had been operating only one business line — canned corned beef — since last July after freezing processing of fresh meat products due to cash shortfalls.

But the ongoing workers’ strike that started on April 17 has halted all operations, worsening the firm’s financial position.

The company, which has been outperformed by private abattoirs, is faced with a burden of debts owed to livestock farmers and banks.

KMC has a daily slaughter capacity of 1,000 large animals and 1,500 small stocks at its Athi River plant and 250 large animals and 500 small stock at the Mombasa factory.

Suspended Agriculture secretary Henry Koskei in March said the monthly Sh18 million staff cost was unsustainable because it did not match output, hence the need for staff downsizing.

notuki@ke.nationmedia.com