Dansa Foods embarks on lay-offs, suspends juice production as recession takes its toll

Dansa Foods, a unit of Dangote Industries Plc, one of Nigeria’s largest conglomerates and private employer is reported to have sacked half of its workforce amid dwindling sales, tight liquidity and high cost of production attributed to the high foreign exchange costs in the country.

In a report on Monday’s edition of the Punch Newspaper, it was reported that Dansa Foods had suspended the production of Dansa Juice and other products, and was only producing Mowa Bottled Water.

The same report said that the company has been unable to pay its workers for the past six months; and as a result, the workers have embarked on a strike to press home their point.

Dansa Foods, according to the report is being run by Alhaji Sani Dangote, a brother of Aliko Dangote, the Chairman and Chief Executive Officer of Dangote Group.

The larger Dangote Group, according to the report, also appears to be feeling the effects of the economic recession sweeping the country, as it also has embarked on a lay-off of 48 members of its staff.

The employees relieved of their duties include 36 expatriate staff and 12 Nigerian workers, all from the group’s cement business.

The reason given for the sack is the high cost of operating the business in the country, especially with the unavailability of foreign exchange and the continuing devaluation of the naira which has made retaining the expat staff burdensome.

In a letter released by the Chief Executive of Dangote Group on Thursday, 20th October 2016, he said that “the firm was constrained to take the ‘tough’ decision as economic factors had affected the cost of production.

The letter further said that “This year has been a very challenging year for us as a business. The unavailability of foreign exchange coupled with an unprecedented hike in the exchange rate has resulted in increased costs across the organization.

On Friday, October 14, 2016, we began the process of staff cutbacks as it is imperative to review our human capital deployment for the required cutbacks that would ensure efficiency and eliminate redundancies in the allocation of human resources.

This first phase of this exercise involved the cutback of 36 expatriate staff across the Dangote Cement Plc and Dangote industries Limited, and 12 local staff members in Dangote Industries Limited.

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