By Phillimon Mhlanga
JAPANESE paint and chemical products giant, Kansai Plascon Africa Group, has embarked on a massive staff retrenchment exercise at its Zimbabwe unit, Astra Industries, the Financial Gazette’s Companies & Markets (C&M) can exclusively reveal.
Apart from Zimbabwe, Kansai Plascon Africa Group, which is headquartered in Johannesburg, South Africa, operates units in South Africa, Zambia, Namibia, Swaziland, and recently opened other units in Nigeria and Tanzania as part of its global expansion efforts.
The push to restructure the group comes after Kansai Plascon Africa Group appointed Farid Masood as the new group chief executive officer (CEO) about six months ago.
Well-placed sources at Astra Industries, the country’s largest paint manufacturer which commands about 45 percent of the local market share, told C&M last week that the company, which has a staff complement of about 250 employees, will throw into the streets about 125 workers during the course of this year as the company scales down operations.
One of the reasons cited for the move was that the company was grappling with a deepening economic crisis in Zimbabwe, which has resulted in the firm struggling to survive.
One source said: “We have already been told that about half of the workers will be dismissed this year, citing harsh economic conditions prevailing at the moment.”
Contacted for comment, Astra CEO, Mackenzie Mazimbe, confirmed that the company is currently undertaking a restructuring exercise but could not give details. He, however, indicated that the exercise was being driven by the company’s headquarters in South Africa.
Mazimbe said: “Like any other business, we are going through tough times and this is putting pressure on our costs. So I will not deny that there is restructuring going on. We have a new group CEO (Farid Masood) who was recently appointed at our headquarters in Johannesburg, South Africa. Truly, there is staff alignment which is going to happen but this is being driven from the headquarters in South Africa.
“I know there is alarm among our workers but as I speak I don’t know the number of our workers who are going to be affected. But I think it’s nowhere near that number that you are talking about. If that is to happen, procedures have to be followed.
He said the restructuring was “not specific to us only but it will also affect these other countries” under which Kansai Plascon has operations.
Astra Industries was bought by the Tokyo-listed paint manufacturing giant Kansai Plascon in 2013. It partnered with Hemistar, an investment vehicle for Astra management and staff, to acquire a 63,25 percent interest in the company from Finance Trust of Zimbabwe.
But an offer to minorities last year resulted in the consortium’s shareholding increasing to 80,2 percent, leaving the amount of free floating shares at less than 20 percent, which is less than the level prescribed by the Zimbabwe Stock Exchange’s listing rules. The ZSE requires that a 30 percent threshold of free floating shares should be maintained for a company listed on the bourse.
Eventually, this resulted in Astra Industries Limited de-listing from the ZSE last year after it could no longer comply with the local bourse’s ownership rules.
Astra Paints was established in 1947 as a commenced business known as Herbert Evans Paints. Over the years, the company merged with other paint companies like Titanium Paints to eventually become Plascon Paints, whose majority stake was then acquired by government through the Reserve Bank of Zimbabwe in 1983.
The company was renamed Astra Industries Limited.
Astra Industries operates two divisions, Astra Paints, which is the largest paint company in the country, and Astra Chemicals, which markets and distributes a diversified range of chemical products to industry.
Astra Paints has two factories, one in Harare and the other in Bulawayo.
The company also controls a 51 percent interest in NCP Distillers, an alcohol joint venture with Hippo Valley Estates.