Sasini sheds 2,000 jobs in five years on mechanisation

Silas Njibwakale, the Managing Director of Kipkebe Ltd, a subsidiary of Sasini demonstrates how tea is plucked at one of the company's tea estates. [File, Standard]

Agricultural firm Sasini has shed 2,182 jobs in the last five years on the back of mechanisation of its tea harvesting process, which has eliminated tea pickers.

The latest disclosures show that Sasini closed the financial year ended September last year with 2,520 employees compared to 4,656 staff it had five years earlier.

The latest headcount marked the fifth straight year of shedding jobs in line with the company automating its tea picking process, which previously accounted for over 60 per cent of the workforce.

Sasini, which had 3,312 tea jobs by end of September 2016 closed September last year with 1,510 jobs in this line. This means that 1,802 jobs related to tea have been shed in this period.

But the headcount under the coffee business unit has been relatively stable, falling by 341 to 854 in the five years to September 2021.

The firm says in the annual report that mechanised harvesting in the tea business has improved efficiency, cut production costs and enhanced the quality of tea produced for the market.

“The cost of producing tea was contained throughout the year due to the company’s serious approach to automation in its fields. In the year under review, we completed our rollout of the field automation programme,” said Sasini Chairman James McFie.

While the mechanisation of the tea picking process has translated into cost-saving for the Nairobi Securities Exchange-listed firm, it has also spelt doom for thousands of workers.

The company produced 12,906 tonnes of tea during the year against the prior year’s 12,445 tonnes, an increase of 3.7 per cent.

The firm’s net profit to September last year grew 45.5 times to Sh573.2 million — the highest in five years helped by increased sales and cost containment measures.

“Several factors contributed to this performance including cost-containment measures in the tea division through automation, improvement in tea production volumes, sale of raw timber, and better than expected coffee price realisation,” said the firm.

Total staff costs fell by 16 per cent to Sh225.75 million from Sh268.62 million, highlighting the savings from reduced payroll.  

But the savings have not been as huge as the cut in employee numbers, largely due to the collective bargaining agreements (CBAs) that have pushed up salaries and wages by at least a third in four years.

Tea industry workers in 2020 benefited from pay rises after the conclusion and signing of CBAs that had been pending for four years to 2019.

The signing of the CBAs saw workers get a salary rise of seven per cent for 2016, eight per cent for both 2017 and 2018 and nine per cent for 2020.

The increases effectively inflated payroll costs by a cumulative 36 per cent, which firms have been responding to by trimming employees.

Sasini said in 2020 that the increased pay had hiked the cost of production and compelled the company to turn to technology in tea harvesting, and other cost-containment measures.