By Chantelle Muzanenhamo
Triangle Limited, a subsidiary of Tongaat Hulett, has revealed plans for a three-phased retrenchment process beginning in 2025.
The company cites a range of economic challenges including rising operational costs, currency losses, the inability to reclaim VAT on inputs following the exemption of sugar from VAT, and intensified competition from low-cost duty-free imported sugar.
In an official statement, Managing Director Tendai R. Masawi articulated the reasons behind this difficult decision.
“Despite our constrained financial position, we chose to show appreciation for our employees’ hard work through a discretionary production bonus. However, it is with great regret that we must announce this significant development within Triangle,” he explained.
The company highlighted that operational costs have surged, with manpower expenses now accounting for 133% of revenue. The increase in expenses for essential inputs like fertiliser, fuel, maintenance, and imported goods has exacerbated financial pressures. Moreover, the impact of inflation, currency fluctuations, and changes to VAT regulations have severely diminished profit margins.
“Since 2022, our profit margins have plummeted by 55%, and we have not been able to generate positive cash flows from operating activities for the past three years,” Masawi reported
The influx of low-cost sugar imports and regional pricing disparities have further complicated the situation, despite efforts by Triangle Limited to bolster revenue and cut costs.
Mr. Masawi assured stakeholders that these layoffs stem from local economic difficulties and are not connected to the shareholders’ situation in South Africa.
“This retrenchment process is not related to the business rescue efforts of our shareholders in South Africa or the acquisition discussions with the Vision Consortium,” he clarified.
Triangle Limited expressed its commitment to supporting affected employees through severance packages and emotional support programs. The retrenchments are part of Project Zambuko, a broader restructuring plan aimed at ensuring the company’s sustainability and its continued contribution to Zimbabwe’s economy.
“This retrenchment exercise is indeed challenging, but it is a necessary step to safeguard the organization’s future and maintain our critical role in both Zimbabwe’s and the Lowveld’s economy,” the statement concluded.
This situation is not an isolated incident, as other major corporations in Zimbabwe, including Beta Bricks, Khayah Cement, Ok Zimbabwe, and Choppies, have similarly faced significant challenges due to currency instability. This trend has raised concerns about the rising unemployment rate in the country.
As the economic landscape continues to pose challenges for businesses, there is a pressing need for responsible authorities to take action to address these systemic issues.