South Africa’s Distell mulls down-sizing in new restructuring strategy

SOUTH AFRICA – Distell Group Limited, multinational brewing and beverage company rooted in South Africa, said it could retrench about 100 employees as part of the restructuring of its supply chain network,reports Business Day.

According to Distell supply chain director, Johan van Zyl, the restructuring strategy will also involve closure of some of its operations as well as increased capacity at other sites as it seeks to improve efficiency.

The move also intends to unlock its growth potential for the listed producer and marketer of wines, spirits, ciders and other ready-to-drink alcoholic beverages.

The company has over 4,000 employees.

“We have identified our supply chain as a key enabler of Distell’s growth ambitions, particularly in the current business environment.

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In our quest to build a customer centric, sustainable and effective supply chain, we continue to explore opportunities to increase capacity utilisation, drive efficiency and extract cost benefits from our supply chain,” said Johan van Zyl.

Distell unveiled plans to scale down manufacturing activities at its Green Park operation in Cape Town, by relocating the bottling and processing activities at the plant to other existing Distell operations such as Gauteng and Adam Tas in Stellenbosch.

Van Zyl said the move was part of the company’s strategy to move bottling activities closer to market.

According to Van Zyl, scaling down its Green Park operations would affect about 800 employees although Distell has created 550 new positions at its facilities in the Western Cape and another 150 in Gauteng.

He said the number of employees affected by forced retrenchments could be less than 100 if its other employees within the group took up its offer of voluntary retrenchments to older staff.

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Van Zyl said the changes were meant to improve supply-chain reliability and customer service as its manufacturing and distribution network seem fragmented and cumbersome.

“We had operations in places which were not closer to the market. It was a competitive disadvantage.

We are confident that we are taking the right steps to optimize our supply-chain network and improve our competitive edge,” he said.

In addition to improved manufacturing asset utilization, the changes would reduce fixed overhead costs, working capital and energy and water usage.

The reforms comes at a time when the company launched, Libertas Vineyards and Estates, a new stand-alone company with ownership of all its premium brands.

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