KENYA-Unga Group Holdings Ltd, one of the largest millers in East Africa with a heritage of over a century in grain milling, is considering a transition plan into a general food company to secure the future of the business.
Unga which is listed on the Nairobi Security Exchange supplies a variety of products ranging from wheat flour products to maize meal, porridge, pulses, and rice to Kenya and east African countries.
In a statement, Joseph Choge, the Groups managing director said that the company is dealing with declining revenues due to increased competition in the milling industry, decreased demand for its products, and high cost of raw materials.
The planned transition is also aimed at meeting emerging consumer preferences and demands, especially with the increasing urban youth population.
“Looking ahead, we have observed changing consumer purchasing habits, particularly among younger consumers who prefer convenient, nutritious foods that are easy to prepare while also being healthy,” said group managing director Joseph Choge in the firm’s latest integrated report
For now, the company is grappling with wheat and maize prices which rose during the fiscal year that ended on June 30, due to poor harvests, a weakening local currency, and adverse fiscal measures imposed by some exporting countries.
In addition, the depriving economy in the country and the shilling’s depreciation against the dollar impacted importation costs, resulting in significant forex losses.
There has also mushrooming of industries in the milling sector in which more than 50 new millers have entered the sector, creating an intensely competitive environment.
Unga group also manufactures nutritional animal feeds which is affected by cheap poultry imports from the region and fish from Asia, resulting in a condensed market for their animal nutrition products.
According to Unga, the company is ready for the shift and has assembled a new product development team to manage the transition.
In addition, the miller has also restructured its executive team with its two subsidiaries; Unga Limited and Unga Farm Care (EA) Limited falling under the management of Group Managing Director and CEO Mr. Joseph Choge.
Previously, the subsidiaries had their own heads who reported to the CEO of the listed entity –Unga Group— through a series of chains of command.
Unga Limited which deals in milling wheat and maize for human consumption was under the leadership of Mr. Andanje Mwairumba .
Dickson Jawichre, served as the general manager for Unga Farm Care (EA) Limited which processes animal nutrition products.
“I wish to notify you that our senior colleagues, Mr Andanje Mwairumba, general manager of Unga Limited and Dickson Jawichre, general manager Unga Farm Care (EA) Limited, will be leaving the company effective today,” Mr Choge wrote in a memo dated November 21.
“The organization will now revolve to a leaner structure with the group managing director as the lead for both subsidiaries”
The two gentlemen have since left the organization and join 117 others who have left the company since last year when cost-cutting measures were switched on to restore the business to profitability.
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