Sugar producer Triangle to retrench workers citing rising operational costs

By Staff Reporter

Chiredzi – One of Zimbabwe’s largest sugar producers, Triangle Limited, has announced plans to retrench an undisclosed number of employees next month. 

The company will implement a three-phased retrenchment program, driven by rising operational costs, currency depreciation, and increased competition from low-cost, duty-free imported sugar. These challenges have led to the difficult decision to reduce its workforce.

The retrenchment process, which will be carried out in phases, is set to begin in late February 2025 and conclude in August of the same year.

In a recent statement, Triangle’s Managing Director, Tendai R. Masawi, explained that a range of factors had made the job cuts unavoidable.

“The current economic environment in Zimbabwe has presented unprecedented challenges for Triangle Limited over the past three years,” Masawi said.

Among other factors, Masawi said inflationary pressures, rising maintenance costs, and the inability to claim value-added tax (VAT) on inputs after sugar was exempted from VAT, have negatively impacted on the company’s operations.

“Escalating operational costs, particularly in areas such as fertilizer, fuel, maintenance costs, and imported goods/services, combined with inflationary pressures, currency losses, the inability to claim VAT on inputs after sugar was exempted from VAT, and competition from low-cost duty-free imported sugar, have severely impacted our ability to sustain current levels of operation,” said the managing director.

“Since 2022, we have seen profit margins decline significantly by 55%, manpower costs increasing by 133% as a proportion of revenue, and debt levels rising to unsustainable levels.

“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 constant trade-offs between what the business needs and what it can afford.”

The decision to cut jobs was arrived at in order to ensure the company remains viable in the wake of an unrelenting and unfavourable economic climate.

“Despite implementing numerous cost-reduction and revenue-enhancement initiatives, these efforts have proven insufficient to stabilize the business. 

“This decision has been taken to protect the long-term sustainability of our organization and ensure that Triangle Limited continues to play its vital role in Zimbabwe’s economy and the livelihoods of communities in the Lowveld region,” Masawi said.

The company has committed to offering fair severance packages and support programs to affected employees. It also emphasized its dedication to working closely with union representatives and other stakeholders to ensure that the retrenchment process is conducted transparently and equitably.

Triangle clarified that the decision is unrelated to the ongoing business rescue process of its South African shareholder or its acquisition by the Vision Consortium.

Since 2022, Triangle’s profit margins have decreased by 55%, while its manpower costs have surged by 133% as a proportion of revenue.

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