Unga Group to cut 50 jobs as the business struggles to stay afloat

KENYA – Kenyan-listed food processing firm, Unga Holdings Limited has declared redundancy, putting 50 jobs at stake.  

In the notice signed on November 24, the company announced that employees would be fired across all its branches, including Unga Limited and Unga Farm Care citing that the company was struggling to record profits.

It further stated that, like other businesses in Kenya, it was struggling to stay afloat and to meet new challenges occasioned by the tough economic times. 

“Our volumes and margins are down. Our sales, particularly for the Unga Limited business, have been below budget consistently, resulting in low capacity utilisation and high fixed costs that are no longer sustainable,” the company stated. 

The announcement comes after the  flour-making company recently posted a KES 959.3 million (UD$6.6M) loss for the year that ended June 30, 2023, attributing the dip to a depreciation of the Kenyan shilling and constrained access to foreign exchange.

This reversed  a profit of KES 311.3 million (US$2.1M) posted in the preceding 12-month period to June 2022, which included gains from the transfer of business assets.

Unga Limited noted that for a time it was facing a challenging of remaining financially viable from both profitability and cash flow perspective. 

“Scarcity of locally sourced raw materials led to increased importation at higher global prices. This led to increased production costs which could not be fully passed to the consumers,” the company remarked during the profit loss warning. 

“We have worked on several initiatives to bring our costs in line with anticipated business performance, but despite this, it has become apparent that we also need to restructure our organization. This will result in loss of job,’ the company told its employees. 

Unga Holdings remarked that it would use objective and quantifiable selection criteria that will include skill, ability and reliability in deciding on the workers to retain. 

Affected workers were advised to seek a counselling programme provided by the company at no cost to the employee. 

“We would like to thank you all for your continued professionalism during this difficult period,” the company told employees facing imminent job loss.