Yet another retrenchment shock is due to hit South Africa, this time at dairy giant Clover South Africa, according to trade union Solidarity.
The union claimed that Clover plans to save approximately R100-million in personnel expenses this year.
Solidarity added that the final retrenchment figure at the company has not yet been disclosed, but it is likely to affect anywhere between 400 and 1Â 000 employees.
The trade union claimed that the retrenchments come shortly after top management pocketed R62-million in share profits after having sold their Clover shares back to the company last year.
The union said that the company’s top management echelons was paid approximately 60c per share and have sold their shares at approximately R6 each, representing a profit of 500% yearly.
Top management’s remuneration includes salaries, bonuses and fringe benefits that probably account for several million rand more, the union further claimed.
The company was not immediately available for comment on the claims.
Clover is South Africa’s largest dairy company, which manufacturers and markets food products in Southern Africa.
The company has a turnover in excess of R3,6 billion and a staff complement of more than 6Â 300. Clover processes some 30% of South Africa’s milk in 17 factories and distributes its range of well-known dairy and related products through 33 distribution depots.
According to Solidarity spokesperson Jaco Kleynhans, the trade union has been beset by furious and anxious Clover employees over the past week. “Clover employees are joining us in large numbers,” he said.
Kleynhans said that the company announced a radical cost-saving programme shortly after the huge payments to top management.
“It appears that the workers have to subsidise the capital gap that was caused by the massive payouts by sacrificing their jobs. At a time when the agricultural sector is under tremendous pressure we find it irresponsible to saddle the company with a large capital burden by paying large amounts to top management,” Kleynhans said.
“It appears from the Clover annual report that payment for the shares by the upper echelons and the payout of the share profits happened simultaneously,” he added.
“In practice, this means that Clover financed the share profits of its top people. Surely the company must have foreseen in 2004 that difficult times were ahead in 2005. How can one justify the expenditure of R62-million in capital during an uncertain agricultural period? Surely all of us knew in 2004 that the rand was strong,” he said.
Solidarity also said that it is having talks with farmers about the possibility of joint action against the company.
Clover SA also announced that it was planning a drastic reduction in producer prices, according to the union.
Kleynhans added that everyone — with the exception of Clover’s top management — now has to pay for the Clover crisis.
“We call this figure management as opposed to business management. It can also be regarded as share profit management instead of business management. Strategies like this are not sustainable and we are worried that Clover may already have gone too far,” Kleynhans said.
Solidarity is to release a report tomorrow to highlight the retrenchment crisis in South Africa.
According to the report, more than 20Â 000 people will be affected by retrenchments over the next 90 days. The report will present several proposals on ways in which the retrenchment crisis can be alleviated. Attempts by I-Net Bridge to get a response from Clover were unsuccessful. — I-Net Bridge