Agricultural firm Sasini PLC cut 267 jobs last year on increased farm mechanisation which it says has raised efficiencies and reduced costs.
The company’s staff numbers fell to 2,300 in the 12 months to September 2023 from 2,567 a year earlier.
Sasini’s non-management staff, who are mostly employed in the farms, dropped to 2,130 from 2,401. Those in management meanwhile increased by four to 170.
"The continuing digitisation in our operations and technological intervention through the investment in mechanised tea harvesting has helped us in reducing wastage, increasing efficiencies and containing the cost of production," the company says in its latest annual report.
"Our successful mechanisation of harvesting and application of fertilisers using drones in our tea business has greatly improved our efficiency, cut our production costs and enhanced the quality of tea we produce for the market. This initiative is being extended to the automation of our tea factories."
The company plans to advance growth in automation to support production capabilities through the modernisation of its factories in various lines.
Sasini’s staff costs declined to Sh359.9 million in the review period from Sh381.9 million the year before, indicating the gains from the reduced workforce.
The latest reduction in jobs adds to Sasini’s cutback in its payroll expenses in recent years. Its workforce has declined from a high of 3,884 in the year ended September 2019, with most of the job cuts seen in the tea estates.
Other agricultural firms are in various stages of mechanising their operations in a quest to also cut costs and enhance efficiencies.
Sasini’s net profit in the year ended September 2023 more than halved to Sh542.5 million from Sh1.1 billion a year earlier due to lower sales and higher costs including debt service expenses.
Revenue dropped to Sh5.7 billion from Sh7.3 billion, an outcome that the company attributed to disruptions in the coffee trade in the wake of milling and marketing license reforms implemented by the government.
“Our business environment is highly regulated and that exposes us to regulatory risk and possible reputational damage in case of breach,” Sasini said.
“During the year the coffee reforms spearheaded by the government heightened within the coffee sub-sector and as a result, heavily impacted our revenue channels. Management continued to build constructive and proactive relationships with our regulators and government with a shared understanding of the need for inclusive economic development.”
Coffee grower Eaagads also saw its sales plunge over 99 percent in the six months to September 2023 to stand at Sh1.1 million, down from the Sh158.9 million recorded last year.
Eaagads attributed the revenue collapse to the reforms which it says have negatively impacted its ability to do direct coffee sales, as had been the traditional practice.
