OLIVINE Industries, one of the country’s biggest players in the fast moving consumer goods market, is planning to cull close to a third of its workforce of over 300 employees at the end of this month.
According to a letter dated July 31, 2017 to employees targeted for retrenchment, the company cited financial problems as one of the reasons for the move.
“Please be notified of the business’ intention to retrench you from employment with Olivine Industries(Private) Limited with effect from September 1, 2017,” wrote the company’s acting general manager, Solomon Madondo.
“The main reason for this retrenchment is that due to the financial problems the company is facing, it has been compelled to change its business model of doing business through rationalisation. The reorganisation of operations processes and systems that the business is implementing will result in your role being redundant through rationalisation. The business has also changed and discontinued some processes whilst outsourcing other activities. This will result in your role becoming redundant.”
Madondo added: “The retrenchment package will be computed as guided by the law, specifically Section 12 C of the Labour Act (Chapter 28:01) and any such other amounts that are due to you as per the law. The computation will be made once the necessary consultations and negotiations by the Works Council are concluded as provided by the law.
“Please be advised that the period August 1, 2017 to August 31 2017 shall be the notification period of the business’ intention to retrench you. Your last date of employment with Olivine Industries is August 31 2017.”
The Financial Gazette can report that so far there has been one works council meeting to discuss the retrenchment packages which was held last week on Wednesday with the second expected to be held this week.
Since the Singapore headquartered agribusiness group, Wilmar International acquired a 49 percent stake in Olivine from AICCO in 2015, to partner State-controlled Industrial Development Corporation which has 51 percent stake in Olivine, it is understood that 30 workers were retrenched in June last year, while the other 15, mainly managerial staff including the chief executive officer and finance director, were sent packing in December last year.
The restructuring has also seen several changes to the board of directors.
Now, the company is retrenching close to 100 workers at the end of this month.
“We thought they (Wilmar International) are coming in Zimbabwe to create employment as per their promise when they were bidding against Willowton Oils, but now in less than 24 months, we are being sacked instead with very little to show for all the many years we have worked for Olivine. What is also happening at Olivine is that the company is employing foreigners who are getting hefty allowances,” one worker at Olivine Industries who refused to be named for fear of victimisation told The Financial Gazette last week.
Another worker, who also requested anonymity, said: “Negotiations on retrenchment packages are not going very well. Given that we have been given one month notice, there is a likelihood that we are getting to August 31, 2017 before we reach an agreement. Given one month to negotiate it’s not enough. What if we don’t reach an agreement, what will happen?”
He added: “The Human resources manager (Tizai Chiswanda) is adamant that we should be given two weeks pay per every year worked. We are saying we want more because managers who were retrenched in December 2016 were given two and a half months salary per every year served. We are told the financial manager (Humphrey Shumba) said the company was moving towards profitability and has no problem in paying for that.”
Contacted for comment on the matter, Olivine Industries board chairman, Peter Madara, referred all questions to the acting general manager, Madondo.
Speaking to The Financial Gazette this week from his rural home in Gutu, Madondo, refused to comment on the matter saying: “Talk to the Madhara (chairman), he is the one with the mandate to speak to the press on these issues.”
Wilmar International pledged to extend a bailout to Olivine to the tune of $32 million in fresh capital after acquiring a 49 percent stake, a situation which could have resulted in growth for Olivine.
But, last year, The Financial Gazette, reported that the Wilmar International, which also has interests in Chitungwiza-based Surface Investments, failed to inject the required funding to recapitalise the business.
Olivine, established in 1931, has been in operation for more than 80 years.
It has grown to become a leading manufacturer of a wide range of consumer and industrial products such as vegetable oils, margarines, soaps, dried beans and canned foods.
Apart from that, the company also produces bakers’ fats, candles, soya meal and cotton seed meal.
Olivine’s subsidiary, Chegutu Canners manufactures canned beans, tomato and fruit products.-Fingaz
