Brookside Dairies in Uganda announced plans to lay off half of its staff citing restrictions on export opportunities to the Kenyan market.
The company, which is a subsidiary of Kenya’s Brookside Dairy, said the failure of the Kenyan government to grant export permits for its products denied it more than 75 per cent of its market.
The company added that restrictions imposed by the Kenya Dairy Board have made it difficult for it to continue to supply Kenya.
Kenya, the company said, is a major market for its products.
“The company has been trying to mitigate the effects of these adverse developments by trying to grow local sales and also source alternative markets for its products in replacement of the blocked Kenyan market,” Brookside said in a letter.
The letter was addressed to the Commissioner of Labour at the Ministry of Gender, Labour and Social Development, Winnie Mirembe Mugabi.
“Having worked on these initiatives for the last three months, it is apparent that we are unlikely to realize tangible results from the initiatives in the short run. We have also engaged the relevant authorities in Government to intervene but without any success,'' the letter reads in part.
The company added that to continue running the factory, the company has no choice but to scale down all its operations across the entire value chain.
The scale down, the firm said, would match the current level of business which it added is at a paltry 25 per cent of the normal operational volumes.
“Under section 81 of the Employment Act, we would like to take this opportunity to inform you of our decision to lawfully terminate employees whose number exceeds 10 on account of structural reasons. 50 per cent of our staff will regrettably be affected by way of a retrenchment intended to take effect in July 2023,” the letter added.
The company noted that its sales were mainly being driven through its network of agents and resellers in the market.
Since 2020, the exports to the Kenyan market averaged 75 per cent of the total milk volumes processed in the company, with 25 per cent being local sales and exports to other countries in the region.
Earlier this year, the Ugandan- based business, filed a petition to the Ugandan Ministry of Trade, industry, and Cooperatives against the move of the Kenya Dairy Board to deny issuing permits for its dairy products in the country.
Brookside Limited, processes and packages long-life milk, cream, butter, yoghurt, ghee, and milk powder in Uganda and the East Africa regional export market.