Chronicle Editor
Nqobile [email protected]
Triangle Limited, a sugar milling entity, has announced a three-phase retrenchment process due to rising operational costs of raw materials and strong competition from low-cost, duty-free imported sugar, among other factors.
The process, in line with the Labour Act of Zimbabwe, is scheduled to begin in February, with the second phase by the end of May and the third phase by the end of August.
The firm said the approach will allow it to “manage the transition with the utmost sensitivity and care.”
In a notice to workers, Managing Director Mr Tendai Masawi said escalating operational costs, particularly in areas such as fertiliser, fuel, maintenance, and imported goods and services, along with competition from low-cost, duty-free imported sugar, have severely impacted the company’s ability to sustain current levels of operation.
“…it is with great regret that we must inform you of a significant development within Triangle. After careful deliberation and extensive evaluation of our operational and economic realities, we have made the extremely difficult decision to implement a phased retrenchment process.
“Since 2022, we have seen profit margins decline significantly by 55 percent, manpower costs increasing by 133 percent as a proportion of revenue, and debt levels rising to unsustainable levels,” said Mr Masawi.
“The company has been unable to generate positive cash flows from its operating activities for the past three years and has faced a very constrained working capital position since the implementation of the revised cane supply arrangements, which has necessitated a constant trade-off between what the business needs and what it can afford.
“While we have managed to address the declining trend in sugar production, our cost of producing sugar remains significantly higher than regional benchmarks, which is no longer sustainable.
“Despite implementing numerous cost-reduction and revenue-enhancement initiatives, these efforts have proven insufficient to stabilise the business.”
Online Reporter