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Namibia Dairies implements 20% salary reduction…urgent rescue measures introduced to stay afloat

2021-08-09  Staff Reporter

Namibia Dairies implements 20% salary reduction…urgent rescue measures introduced to stay afloat
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Namibia Dairies on Friday confirmed its decision to introduce urgent rescue measures to safeguard the future sustainability of its business. In a statement issued on Friday, 06 August 2021, the Ohlthaver & List (O&L) Group subsidiary said it was left with no option but to introduce measures to mitigate the increasing risks brought about by a dairy sector that is facing a grim future.

The newly introduced temporary measures include a 20% salary reduction to be implemented in line with Section 12 (6) of the Labour Act, Act 11 of 2007, effective 01 August to 31 October 2021. 

“The Covid-19 pandemic has had an exceedingly harsh impact on the dairy industry that has continuously been challenged for many years. The O&L Group has always and continues to believe in the collective power of its people and that indeed, anything is possible. That view has not changed. However, despite supportive and mitigating measures invoked, the harsh realities of the current economic climate continue to dilute the growth plans put in place to ensure the future sustainability of Namibia Dairies”, said Leonie Prinsloo, Managing Director (MD) of Namibia Dairies (ND). 

The MD added that the company recently reorganised its sales and human capital departments that were identified as a critical measure to be efficient and save costs.  “This was by no means an easy decision, but it was the responsible and necessary action to ensure a future for our people and business. We have an opportunity to be part of creating a legacy and owning the future of a new sustainable Namibia Dairies. I am optimistic that with our collective resilience, tenacity and spirit of camaraderie, we will stand the test of time and together come out stronger more than ever before”, Prinsloo stated.

She further explained that Namibia Dairies has been in a negative cash flow situation for a prolonged period, with its shareholder (O&L) having injected millions over the past two years to keep the company’s operations afloat. 

“I know that the leadership and the people of Namibia Dairies are fully committed to this journey, as we know that more than livelihoods and a contribution to national growth are now at stake. Our focus during this crisis thus far was to trade our way out of a difficult situation, where the focus was on revenue generation, cost reduction without impacting standards, and the simultaneous safeguarding of livelihoods. Some of the measures included a reduction on overtime costs, revisiting operational expenses, optimising delivery routes, reviewing external agency business opportunities, an extensive investigation of product profitability, negotiating better supplier rates, and freezing and only filling vacancies that were absolutely critical to business continuity, amongst others, up to the newly introduced temporary business rescue measures”, Prinsloo added. 

2021-08-09  Staff Reporter

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