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| Tata Chemicals Magadi MD Jack Mbui |
Africa’s largest soda ash manufacturer and Kenya’s largest exporters, Tata Chemicals Magadi (TCM) said it is laying off 200 permanent employees in a restructuring process to save firm’s high overhead costs and survival of its business.
Formerly Known as The Magadi Soda Company, yesterday said it’s board has considered suspending its plant operations after almost a decade search to efficient way to cut its operation costs.
The company said the ‘painful’ decision has been pushed by high energy costs of running its premium ash magadi (PAM) plant-high global energy prices it said have threatened viability of the plant.
According to the firm’s Managing Director, Eng. Jack Mbui the closure will cost the economy Sh 43.4 billion(USD 500 million) in annual losses.
He said the planned shedding of jobs is set for the second Quarter of the 2014/15 Financial.
“The proposal to mothball TCML’s PAM production plant was a painful one, precipitated by the high energy costs that have overwhelmed the viability of this plant. Despite exploring various other options over the last eight years, it is regrettable that TCML has been unable to mitigate sufficiently the serious impact of the energy costs on its business,” said Mbui.
Restructuring the company said would aid in securing employment of the remaining colleagues and strengthen is operations.
High cost of operations has seen the firms expenditure stall at an all time high of Sh 300 million per month, the company termed the plant not viable.
TCML has gone back to the drawing board to review new opportunities to grow its business in existing and new markets and to secure its presence in Kenya for the long term.
“We thank all our stakeholders and employees in particular for playing a vital and constructive role in the company’s efforts to stabilise its business as it seeks opportunities for growth” Mbui said.
The manufacturer has already begun process of fulfilling its legal and contractual obligations to the impacted employees and intends to commence consultations with the affected employees and their union to look for the best way to compensate and free them off.
A consultation and counselling team has been set up for transition assistance in coming few months.
The company is an important part of the socio-economic fabric of the Lake Magadi region in Kenya where its soda ash facility is based.
