ABOUT 200 employees working in the Premium Ash Magadi plant will be laid off from October in a planned closure of the facility, Tata Chemicals Magadi Limited has said.
The management said the anticipated job loss are occasioned by high operating costs in the manufacture of soda ash which led to the restructuring proposal, also known as mothballing.
"The restructuring proposal of this facility follows a comprehensive review of alternatives to improve plant performance such as efforts to reduce energy cost,
operating effectiveness and efficiencies," managing director, Jack Mbui said.
The plant was founded in 1873 as Magadi Soda Company and Tata Chemicals acquired it from United Kingdom based, Brunner Mond & Company in 2006. TCML has been sole manufacturer and exporter of soda ash and it operates in Magadi, Kajiado and Mombasa.
Mbui said they will start consultations with the employees and their union in order to prepare those who may be potentially impacted by the eventuality of the lay off process adding that the company will fulfill its legal and contractual obligations to the impacted employees.
"A team has been set up to assist in transition during the coming months with immediate effect. The affected employees will receive due compensation for valuable services rendered to the company," he said.
According to Mbui, the decision to preserve the facility without using it to produce was factored in following the steep rise in global energy prices and the need to secure the future of the remaining soda ash and salt business and associated jobs. He said the plant accounts for about 70 per cent of the overall TCML's energy consumption.
"The proposal to mothball the production plant was a painful but challenges have overwhelmed the viability of this plant. Despite exploring various options over the last eight years, it is regrettable that TCML has been unable to mitigate the serious impact of the high energy costs on its business," he said.
He said restructuring the company will help in securing employment of the remaining employees and provide a sustainable presence in the country.
He said the government should use TCML as an example of how the prevailing high energy cost seriously threatens the competitiveness of energy intensive manufacturing companies.
"All stakeholders need to work hard to address these challenges to avoid further damage to the manufacturing base as we look to the future opportunity to grow the business," he said.