BAT had spent Sh338.1 million to retrench 40 employees the previous year when the technology-aided layoffs started.
The new retrenchment cost was among the increased expenses that saw the company’s net earnings drop 21.2 per cent to Sh3.3 billion in the year ended December.
Cigarette manufacturer BAT Kenya #ticker:BAT has dropped 24 more employees at a cost of Sh392 million, intensifying its retrenchment as the company reaps the benefit of increasingly automated production.
The workers were sent home in the second half of the year ended December.
BAT had spent Sh338.1 million to retrench 40 employees the previous year when the technology-aided layoffs started.
The new retrenchment cost was among the increased expenses that saw the company’s net earnings drop 21.2 per cent to Sh3.3 billion in the year ended December.
“Our intensive productivity drive through new working practices in operations and investments in technology has led to more efficient and effective ways of working,” BAT says in its latest annual report.
“This has regrettably resulted in a reduction of 24 people from the BAT Kenya operations team.
“We have treated those affected by restructuring exercises with dignity, sensitivity and fairness.” BAT’s current workforce on permanent contracts stands at about 400. The company says nearly two-thirds of its machines are now on the “integrated work systems (IWS)” programme which boosts efficiencies, increases productivity and eliminates waste.
“Our efficiencies have improved by an average of 11 per cent in 2017 versus 2016 … We will continue to use IWS to make the most of our existing machinery. The improved performance above has led to a capital expenditure avoidance of over Sh100 million,” BAT said.
The company operates a cigarette factory in Nairobi and a green leaf threshing plant in Thika.
“The Kenya manufacturing hub is one of the three strategic factories in Africa, for the BAT Group,” the company said.
“Its strategic location enables us to maximise efficiency and ensure that products for both the domestic and export markets are where they need to be at the right time.”
BAT, which usually pays out its entire earnings as dividends, broke with that tradition in the distribution for the year ended December which amount to 78 per cent of net profit or Sh26 per share.
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Note: The results are not exact but very close to the actual.
