Politics and policy
300 lose jobs as Eldoret maize miller shuts down
Posted Wednesday, July 25 2012 at 19:01
Eldoret-based Corn Products Kenya, which manufactures animal feeds, starch and dextrose, has shut down, leaving about 300 people without jobs.
High maize prices and rising operational costs hurt its competitiveness in the market, giving importers an edge, said the management in a statement to its workers.
The company, established in Kenya in 1973, is also changing tack to import the products it has been making, marking the end to one of the largest manufacturers in the Rift Valley town.
Alan Bradley, the vice-president for Africa and managing director of the Kenyan subsidiary, said the closure was precipitated by the high cost of maize since the government got actively involved in pricing of the commodity.
Mr Bradley says Corn Products was no longer able to compete with importers, which have eroded its market share.
“Despite efforts to turn the business around, it is no longer profitable, it has been determined that there is no other viable option,” the MD told workers.
The closure comes in the wake of a merger between Corn Products International and National Starch that was to see the company change name to Ingredion Company in September.
A source within the company, however, said poor management may have pushed the miller to the edge.
“There was lack of proper management here. The company has changed CEOs three times,” said the source who asked not to be named.
The company told the staff in a letter whose copy the Business Daily got that hard economic times was the reason for closing shop.
“CPC has been encountering continuous and increasing disadvantage over the years. As a result, we have decided to disengage from production operations in Kenya,” the letter reads.
Employees who were asked to look for jobs elsewhere accused Corn Products of giving short notice while they had financial obligations like repaying loans.
On Monday, the company’s sewer line was disconnected for what the Eldoret Water and Sanitation Company (Eldowas) managing director , Mr Reuben Tuei, attributed to failing standards.
“When we asked they said the cost of production was high and could not meet standards,” said the MD.