Cadbury Kenya plans to close down its manufacturing plant in Nairobi as part of a global transformation strategy to reinvent its supply chain.
The company said it would cease all operations at its factory in Kenya by the end of this month and only retain marketing and distribution functions.
The move will leave about 300 Kenyans who worked in the plant, either as permanent or casual employees, jobless.
It becomes the second firm in as many days to cease local manufacturing after Eveready Ltd announced the closure of its dry cell-making plant in Nakuru on Monday. About a hundred people lost their jobs in that closure.
Mondelçz International, the US-based parent company of Cadbury Kenya, told the Business Daily’s sister paper, the Daily Nation, that it would now “focus its resources on scale manufacturing facilities where it can generate greater efficiencies, to reinvest in growth”.
The company will import its products from Egypt to sell locally.
“The decision has been taken after careful consideration and extensive due diligence and allows Cadbury Kenya to invest in creating a more commercially focused business in East Africa, with Kenya as its hub,” said Ms Navisha Bechan-Sewkuran, the firm’s corporate and government affairs lead for Southern, Central and Eastern Africa.
In 2011, the local factory stopped making Cadbury Chocolate, one of its biggest products, with the firm opting to import it from South Africa.
The company, which has been in operation for more than 60 years, is synonymous with products such as Cocoa, Cadbury Drinking Chocolate, Oreo biscuits and Trident chewing gum.
The company insisted that it would continue investing in the region in spite of the decision to move its plant.
“It is our intention to more than double our business here during the next three years,” said Ms Bechan-Sewkuran. “We plan to invest substantially in marketing and our distribution network to reach more and more consumers.”
An insider at Cadbury Kenya said the company was computing employee benefits ahead of their dismissal.
“We are a company which treats its employees with fairness and respect, and we adhere strictly to national labour laws and regulations, as well as international best practices,” noted Ms Bechan-Sewkuran.
Other manufacturers that have closed production lines in the country include Reckitt Benckiser, Procter & Gamble, Bridgestone, Colgate Palmolive, Johnson & Johnson and Unilever.
Reckitt Benckiser, a global home and personal care giant, left Kenya and now uses the services of Orbit Chemical for its JIK, Dettol and Harpic brands.
Colgate, another casualty, has also shipped out.
The trend should worry the government which is charged with creating an enabling environment for new and existing investors to operate. This is meant to creation more jobs in the economy.
“There are regulatory aspects that do not support the country’s bid to attract foreign investments. Issues like existing non-tariff barriers make the country less competitive,” said Ms Betty Maina, the chief executive of the Kenya Association of Manufacturers, Tuesday.