PPC retrenches

BULAWAYO-BASED cement producer Pretoria Portland Cement (PPC) Zimbabwe has initiated a voluntary retrenchment exercise that will result in at least 100 employees leaving, a clear sign firms continue feeling the pinch of the decade-long economic meltdown.

PPC started the voluntary retrenchment exercise - which the firm calls voluntary separation package (VSP) - last month and the process was expected to be finalised in November.

VSP is defined as an employee reduction process where willing employees are given an opportunity to consider a specific package offered by the employer.

PPC Zimbabwe managing director Njombo Lekula confirmed the development and said the company was overstaffed, attributing it to failure by the firm to cut its work force during the decade-long period of economic downturn.

As a result, the majority of its workforce is now over 50 years of age, which Lekula said was unsustainable for the company.

"The negative effect of overstaffing is that you are unable to take on new employees into the organisation, resulting in the workforce ageing," Lekula said.

"The current workforce in both operations combined has grown since 2005 to date from 22% to 40% for the over-50 year age group, which is not sustainable if you consider a decrease on age category below 40 years from 45% to 21% in the same period," he added.

Lekula said to reduce its staff, the company had opted to go for the VSP and was targeting offloading between 75 and 100 employees, adding that employee engagement had taken place as prescribed in the Labour Act and the objectives of this process had been communicated to all employees.

"Every employee's possible package has been calculated and given to those considering accepting the VSPs," he said.

Lekula revealed that most of PPC's employees considering an option to take VSP were those who were very close to retirement after many years of service with PPC Zimbabwe.

He said the retrenchment exercise would allow the company to introduce new skills in its system to cope with new technology.

The pending retrenchments at PPC Zimbabwe come at a time industries in Bulawayo are listed in critical condition.

Last year alone 84 companies closed shop while 64 were reported to be on the verge of collapse.

According to a manufacturing survey by the Confederation of Zimbabwe Industries, the country's industries have reduced capacity utilisation to 44% from 57% as of June this year, as firms continue to face challenges including subdued foreign direct investment, limited long-term loans and huge energy deficit, among other things.