The Sunday Mail
Africa Moyo —
GIANT milk processor Dairibord Zimbabwe (Private) Limited (DZPL) has restructured its operations, creating a lean structure as part of belt-tightening measures expected to whittle down selling and administration costs by a minimum of 10 percent per annum, The Sunday Mail Business can reveal.
The restructuring exercise will result in the creation of six functional lines namely marketing services, manufacturing, finance human resources, commercial services information communication technology, procurement.
The tweaking of the organisational structure takes effect from January 1, 2017. Dairibord Holdings Limited corporate communications manager Mrs Imelda Shoko confirmed last week that a new organisational structure, modelled along functional lines, has been crafted.
Next year’s restructuring exercise is a continuation of a programme that started in January this year when Martindale (Pvt) Ltd (trading as Lyons), and NFB Logistics (Pvt) Limited, commenced trading as divisions of DZPL but retaining their distinct corporate brands.
Mrs Shoko said the January 2016 restructuring exercise was the initial phase of a process aimed at streamlining the group’s operations in the country.
“The corporate restructuring exercise entailed the consolidation and integration of all divisions in Zimbabwe into one company, Dairibord Zimbabwe (Private) Limited.
“Subsequent to this, a new organisational structure, designed along the following functional lines, will come into effect on 1 January 2017; marketing services, commercial services, manufacturing, finance human resources, ICT (and) procurement,” said Mrs Shoko.
All the new functions will be headed by an executive reporting directly to the group chief executive officer, Mr Antony Mandiwanza.
However, the audit function is the only that would continue to report directly to the Board, presumably to avoid conflict of interest involving the chief executive.
In companies where the chief executive is all powerful, every department including audit, reports directly to them, usually resulting in the department pandering to whims and caprices of the boss for fear of being sacked.
Powerful CEOs also plunder company resources in the comfort that no one would hold them to account. Mrs Shoko said Dairibord’s restructuring exercise would achieve “a leaner, market facing structure devoid of duplication of roles, duties and product offerings”.
“The leaner structure seeks to ensure that the company is in a better position to deliver superior value to the company’s valued customers, business partners and stakeholders.
“To the consumer, the new structure brings with it convenience and an improved service experience as all the products will be available through one route to market.
“Indeed, cost containment is one of the motives behind restructuring. We expect our 2017 selling and administration costs to reduce by a minimum of 10 percent following the consolidation of the Zimbabwe operations into one company legally and operationally,” she said.
Dairibord Malawi, a joint venture between the Malawi government and Dairibord Holdings which was established in 1998, remains a stand-alone subsidiary business unit of Dairibord Holdings and will continue with its operations as before.
Dairibord Holdings purchased 60 percent equity into the Blantyre operations of the former state-owned Malawi Dairy Industries at privatisation and the government of Malawi retained a 40 percent stake in the new entity.
The tweaking of DZPL’s organisational structure comes at a time when the Zimbabwe Stock Exchange-listed concern reported a loss of US$1,9 million in the first six months to June 30, 2016, from a profit of US$317 000 in the comparable period.
During the same period, Dairibord’s revenues also slumped by 12 percent to US442,5 million due to consumer price adjustments made to address affordability and competitiveness against static volume performance.
The average consumer price realised per litre of product sold was 11 percent below the prior year. This year, Dairibord invested US$2,4 million in peanut butter processing equipment, cartonised UHT filling equipment and Pfuko-Udiwo Maheu capacity expansion. DZPL, the flagship subsidiary of Dairibord Holdings, is owned 100 percent by Lavenson Investments (Private) Limited.
Lavenson Investments is also owned 100 percent by Dairibord Holdings.
