Kakuzi offers workers 18 per cent salary increase in two years

Kakuzi Plc Managing Director Chris Flowers. PHOTO | DIANA NGILA | NMG

By LINET OWOKO More by this Author

Agricultural firm Kakuzi has signed a collective bargaining agreement (CBA) that will see its unionisable workers get a pay rise of nine percent this year and a similar hike in 2023.

The Nairobi Securities Exchange-listed firm said yesterday that it has signed the 2022/23 agreement with the Kenya Plantation and Agricultural Workers Union (KPAWU).

The move will raise the company’s expenses, with salaries among its major operating costs. Kakuzi’s chief executive Chris Flowers said the pay hikes were effective last month.

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“As part of the agreement with KPAWU, the firm will backdate the due payments to January this year. The company will load the other nine percent increase onto the Kakuzi unionisable staff salaries in January next year,” the company said in a statement.

The agricultural firm had a total of 3,662 unionisable employees in the year ended December 2021, with most of them on short-term contracts. The firm had 70 staff in management ranks

Kakuzi’s total payroll costs rose to Sh920.2 million in the review period, up from Sh810.8 million the year before.

The pay rise comes at a time a number of companies have either frozen salary increments or opted to cut jobs as sales and margins fall.

Kakuzi has, however, registered improved profitability, helped by sales growth.

The company made a net profit of Sh341.2 million in the six months to June, representing a 75.3 percent rise from Sh194.6 million a year earlier.

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“The Kakuzi management celebrates our shop stewards and KPAWU leadership for their commitment to reviewing the CBA in a most cordial environment,” Mr Flowers said.

“The give-and-take engagements and negotiations allowed us to attain a win-win position on several clauses, including the nine percent salary increase effective this month and another nine percent in 2023,” Mr Flowers said.

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