2,000 jobs at risk as James Finlay closes Kericho flower farms

Cotu secretary-general Francis Atwoli. file photo | nmg 

By ANITA CHEPKOECH

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Summary

• James Finlay says high cost of labour in Kericho coupled with persistent industrial action has forced it to abandon flower farming.
• Finlay indicates it will, however, continue to expand operations on Lemotit farm in Londiani as a business supplying flowers to the UK, the US and Asia.
• The company also operates farms in Naivasha and Mount Kenya area.

UK agriculture multinational James Finlay on Thursday announced plans to stop flower production on its Kericho farms, thrusting some 2,000 workers into a future without jobs.

The company, which is one of world’s largest tea producers and exporters, said high cost of labour in Kericho coupled with persistent industrial action had forced it to abandon flower farming.

“James Finlay Kenya regretfully announces the start of the phased closure of its flower operations in Kericho. The closure of both Chemirei and Tarakwet farms will take place over a two-and-a-half year period starting May 2018 to end of December 2020,” the company said in a statement.

“It has been an extremely difficult decision but labour costs in Kericho are significantly higher than other locations in Kenya, causing the Kericho farms to be uneconomic and uncompetitive,” Finlay Flowers general manager Steve Scott said.

Finlay indicated it will, however, continue to expand operations on Lemotit farm in Londiani as a business supplying flowers to the UK, the US and Asia.

The company  also operates farms in Naivasha and Mount Kenya area.

Mr Scott said Finlay had chosen a phased closure of the Kericho operations to minimise its impact on employees and their families, adding that the company “is committed to helping employees find other job opportunities where practicable.”  

The decision represents a big slap in the face for the unions whose persistent demands for higher wages is being blamed for pricing Kericho produce out of global markets.

The Finlay farm closures come nearly two years after the Employment and Labour Relations Court awarded the company’s flower workers as well as Unilever Tea’s employees a 30 per cent pay increase.

READ: Plantation workers’ pay rise halved, told to harvest more tea

The backdated pay rise was to cover 2014 and 2015 and came after Finlay had awarded its employees as 10 per cent interim pay raise.

Joel Soi, a political science lecturer at Maasai Mara University, said the turn of events was expected in a country where the labour movement has become preponderant.

“China attracted investors in the 1990s because its labour was cheap. The Chinese goods are cheap because its labour is cheap. Kenya must take a hard look at the cost of labour in order to remain competitive in the global markets,” he said.

He called on President Uhuru Kenyatta to spearhead the regulation of the labour market if the goals of his Big Four development agenda, especially manufacturing, are to be achieved.

Multinational tea firms recorded massive losses in the last quarter of 2017, partly because the 40,000 workers on Kericho, Bomet and Nandi tea farms joined industrial action to press for better pay.

READ: Levy row brewing over tea plucking machines

The Kenya Tea Growers Association (KTGA), whose membership includes James Finlay, George Williamson, Kaisugu and non-member Unilever, said it had lost millions of shillings during the strike.

The industrial action severely paralysed operations, including picking and processing of green leaf for more than two weeks.

The Court of Appeal later cut the annual pay increase to eight per cent to be effected over two years.

KTGA said its members would have resorted to tea-picking machines had the unions’ demands been upheld. Nandi County has signalled it will impose a tax on the machines to prevent job losses, potentially making the region uncompetitive for plantations.