Agricultural firm Sasini #ticker:SASN reduced its headcount by 240 employees as it deepened the use of technology to contain soaring costs resulting from wage increases.
The firm closed the year ending September 2019 with 3,884 employees, compared with the 4,124 it had in the preceding similar period, its latest annual report shows.
Workers hired for tea and coffee firms were the most affected, with a combined 443 being sent home. However, staff count in other categories rose by 203.
The firm, which sunk into a net loss of Sh337.7 million in the period under review on the back of lower sales and declining tea prices, blames reduced jobs on higher salaries and wages bargained by unions.
Kenya Plantation and Agricultural Workers Union negotiates pay increments every two years.
The latest was last year when workers got a pay rise of nine percent. This was paid alongside the seven percent raise for 2016 and eight percent each for 2017 and 2018, all which had remained pending.
“The cost of labour has also continued to rise as the labour unions continued to demand higher wages during the year.
“The pending four-year CBA discussions were concluded resulting in increases in wages that heavily affected our cost of production,” Sasini says.
“We initiated the use of technology in tea harvesting to help contain the ever-rising cost of production in our tea business and ensure sustainability going forward.”
Staff costs rose by 11.8 percent to Sh219.7 million during the period under review forcing the Nairobi Securities Exchange-listed firm to halve its dividend to Sh0.5 against its custom of Sh1 payout split equally between interim and final payout.
In 2018, Sasini initiated automated tea harvesting in Magura tea estate and expanded this last year by installing tea plucking machines at Kiptenden tea estate.
“We will continue to advance this in our own estates and implement the technology to support the current manual tea plucking in a complementary approach,” says Sasini in a move that could mean more job losses.
The firm is also counting on the avocado and macadamia businesses to diversify its income and reduce reliance on tea and coffee. The two became fully operational in the last financial year.