THE WHAT? South Africa’s Tiger Brands is looking to cost cut to the tune of 500 million rand ($32 million) in 2021 following a fall in annual profits, with 400 jobs cut as part of the saving measures.
THE DETAILS With FY results showing a fall from ZAR1.03bn to ZAR3.89 bn the previous year, other cost saving activity will include improved efficiency in factories, utility cost savings, alternative sourcing and negotiating better deals with suppliers.
Job cuts have already been made across all of the business activities, from operations to manufacturing and head office.
Tiger Brands is also said to have concluded a sale of its personal care brands, including the Gill Shampoo and Lemon Lite facial creams.
THE WHY? The business has been hit hard by COVID-19, with CEO Noel Doyle telling analysts that the pandemic had impacted consumer demand as well as disrupting the effectiveness of its supply chain. Its own manufacturing capabilities were also compromised due to employee infection.
Looking forward, Doyle said, “The anticipated volatility of the Rand and increasing levels of unemployment will negatively impact both the supply and demand dynamics of our business. The continuing pressure on consumers’ disposable income highlights the need for an enhanced focus on value propositions as well as cost reduction initiatives.”