Beverage manufacturer Delta Beverages has introduced a raft of cost-cutting measures which include freezing staff recruitment and promotions as well as reducing canteen costs, after a slump in sales of their products.
The company reported a subdued volume performance across all beverage categories for the first quarter ended June 2015, according to trade results released this week.
In a memorandum to all human resources heads, general managers and heads of departments dated June 15 2015, human resources director Marshall Pemhiwa said there was need to streamline operations in line with declining volumes.
“Business performance continues on a downward spiral. Naturally, we need to respond with speed to streamline our operations in line with the business performance,” he wrote. “With immediate effect all external recruitment and internal promotions are frozen. Exceptions must be authorised by the relevant business director, human resources director and chief operating officer.”
Pemhiwa said the beverage manufacturer had also frozen the recruitment of student interns until further notice.
He said the volumes “remain soft”, creating the need to rationalise operations and reduce the company headcount.
Pemhiwa said only training intervention that drove productivity would be considered, adding that interventions which did not directly impact on productivity “must be temporarily shelved”.
On overtime, Pemhiwa said there would be strict monitoring of extra hours put in by staff.
“As a matter of discipline, all overtime must be fully justified prior and signed off at executive level. Furthermore, the business will institute other measures aimed at driving this cost down while maintaining efficiencies, for example, shift re-configurations,” Pemhiwa wrote.
He also instructed that leave liability be driven downwards to an average of 30 days by September this year.
“Once the leave plans kick in and shifts are revised in line with declining volumes etc, there is an expectation of a corresponding reduction in canteen costs,” he wrote to managers.
“HR and respective HODs, please drive these vigorously as a first step in order to avoid other more painful measures.”
Delta’s company secretary Alex Makamure would neither confirm nor deny the letter but said its contents addressed issues that any business should deal with to survive in the current operating environment.
“The internal memorandum circulating in the social media addresses issues that any business should deal with to survive in the current operating environment. It, however, does not talk about retrenchments. We have on numerous occasions indicated that we have flexibility in managing headcount through the pool of fixed term contract employees,” Makamure said.
In the quarter ended June 30, Delta recorded a decline in volumes across all categories.
Lager volume declined by 8%, sparkling beverages recorded a 15% decline with the Maheu and dairy mix beverages recording a 11% drop due to depressed consumer spending attributed to weak macro-economic performance.