1 000 Cairns workers sent on unpaid leave

OVER 1 000 workers at Cairns Foods Limited’s branches in Bulawayo, Harare, Marondera and Mutare were left stranded last month after they were sent on unpaid leave after the company was placed under judicial management due to financial problems.

REPORT BY SILAS NKALA STAFF REPORTER

The Zimbabwe Congress of Trade Unions (ZCTU)’s western regional officer Percy Mcijo confirmed the development yesterday, but referred questions to the Federation of Food and Allied Workers’ Union of Zimbabwe (FFAWUZ) for more details.

FFAWUZ secretary-general Unganayi Dickson Tarusenga yesterday said over 1 000 workers at the Cairns branches across the country were sent on unpaid leave as the company was placed under judicial management in December.

“Yes, it is true the company was placed under judiciary management in December last year and the workers who have not received their salaries for the past six months were sent on unpaid leave,” Tarusenga said.

He said Reggie Francis Saruchera of Grant Thornton Camelsa Chartered Accountants had been appointed judicial manager and tasked to run the company in collaboration with the workers.

“Workers, management and the judicial manager are supposed to sit down and agree in terms of how the company should be run if it has to survive, and according to what we got as a union is that they agreed that they be sent on unpaid leave,” he said.

“As a union, we come in to advise our members on the best way they could run the company and benefit from it.”

Saruchera confirmed yesterday that he had indeed been appointed judicial manager for the food processing and canning firm.

“It’s true, but could you send your questions in writing for more details?” he said.

At the time of going to print, Saruchera had not responded to the questions e-mailed to him.

Cairns has been facing liquidity challenges, which affected its operations as it struggled to secure working capital.

The latest crisis came at a time when Bulawayo has recorded over 90 company closures with some relocating to Harare while others were placed under judicial management.

36 Responses to 1 000 Cairns workers sent on unpaid leave

  1. Gutter Poet January 9, 2013 at 8:54 am #

    Perhaps the reporter could do a follow up and tell us why Cairns which had a virtual monopoly on canned foods finds itself in this predicament..you have told us the end of the story without filling in the meat in the sandwich..what is really going on at Cairns? Or rather what happened before we got to this very ugly end? I hope you are not going to be told some cock and bull story about lack of working capital..because my understanding is the situation is a lot deeper than this.

    • shingi January 9, 2013 at 4:32 pm #

      I agree with you Poet, industrialists used to blame Forex shortages… but its clear now that poor management is our problem,,, with all the MBAs they still fail. Too much text book practices instead of thinking outside the box.1by1 these companies will fall.

  2. SBG January 9, 2013 at 9:31 am #

    Look into Silus Gweshe’s company & investments, that’s where some the money went.

    • mm January 9, 2013 at 10:10 am #

      @SGB Gweshe did nothing, he was appointed CEO last year after. Chigumira’s death. Chigumira destroyed the company, most of the contractors were CHigumira’s relative (dry cleaning, computor suppliers, etc) if you look at the other directors Magadza & Chikwanda they were related to Chigumira. they looted the company, most of these suppliers were being given paymemnts in advance before supplying anything. i do not know the auditors were not raising the issue. at one time casuals were employed under cairns payroll and work at Chigumira’s house. still believe Chigumira’s accident was succidal as the same day of accident there were altercations with employees concerning salaries. parastatals should wake up, why keeping someone as CEO for more than five terms ? check the Late chigumira’s assets they were a result f looting, some of he vehicles at his farms are cairns vehicles.

  3. Great Zimbabwe January 9, 2013 at 10:15 am #

    @gutter. for the benefit of Zimbabweans but specifically students of industry and commerce, the Cairns issue is a classic case of bad business management. The basic principles of business management were violated. Here is why? 1) Cairns is one of those many companies in Zimbabwe which did not upgrade plant and equipment since they started their operations. The company therefore lost its competitiveness as time progressed resulting in producing expensive products in light of competing imported products . What was the logic of declaring dividends before reinvesting the cash for technological upgrade?
    2) The company also suffered from raw material shortages, emanating from land reforms. Instead of proactively and aggressively securing its supply chain by contracting farmers or establishing its own estates, management at Cairns wished that the problem would disappear. It didn’t but instead its the company which is now almost disappearing.
    3) Business decisions were generally flawed, e.g. Cairns bought out Dairiboard from ME Charhons , a predominantly milk-based business in the process wasting precious liquidity. One therefore wonders, which between the two (Cairns and Dairiboard) would derive high synergistic benefits from investment in ME Charhons?
    4) It is reported from grapevine that some top managers at Cairns behaved more like politicians than entrepreneurs…the desire to be treated like VIPS, pampered with benefits beyond what could be called reasonable and supported by business principles was the beginning of a culture impunity and entitlement, which is normally accompanied by abuse of company resources.
    5) Where is the shareholder when the company collapses and management is inept. One would think that a shareholder will spring into action firing and hiring management, arranging for a rights issue or seeking strategic partners. Thus it is easier to conclude that in the case of Cairns poor shareholder oversight allowed the situation to deteriorate.
    6) There is a syndrome in Zimbabwe’s corporate sector of managers who have been CEOs since 1980s. Why there is no succession planning beats me, but results of that scenario are exemplified in this case.
    7) …

    • L. Nyati January 9, 2013 at 4:41 pm #

      ‘@ Great zimbabwe, which farmers would Cains contract when even BIPPAs got disignated after invasions and what kind of the socalled resettled farmers would be able to understand the contract terms and agro-high quality controlled products – my foot!!

      • Great Zimbabwe January 9, 2013 at 4:58 pm #

        @ L. Nyathi there are several companies contracting farmers to produce the products they use. I will mention some: Dairiboard, Nestle and Delta while others like Ariston & CFI have their own estates where they are growing crops or rearing livestock. Cairns, thus should have been at the forefront in tackling all the risks which came with land reforms. For them to fold hands and assume that somehow things will change means the management is either incompetent or they are not being monitored by shareholders.

        • munjanja max January 9, 2013 at 5:48 pm #

          Your assessment is too good. L nyati should know that there are lots of black farmers who are complaining of their produce rotting in the eastern highlands due to issues at Cairns. Some sections of our black community are morbidly hopeless to the extend that they don’t even believe they can do anything for themselves.

  4. We De Mbare January 9, 2013 at 10:15 am #

    Ko Kasukuwere batsira company iyi

  5. SBG January 9, 2013 at 10:18 am #

    @MM, Gweshe was the finance director and well aware of the funds of cairns.

  6. SBG January 9, 2013 at 10:23 am #

    @Gutter, your point number is spot on, only if you knew at what capacity they were doing it you will be shocked. Very unethical!!!!

  7. SBG January 9, 2013 at 10:27 am #

    @MM, Gweshe also has IT company where Cairns would buy computers & accessories. Now tell me is that ethical business practice, is that not conflict of interests?

  8. SBG January 9, 2013 at 10:33 am #

    @Gutter, I meant to say point number.

    • SBG January 9, 2013 at 10:40 am #

      point number 4

  9. Tinashe January 9, 2013 at 11:39 am #

    Look around and wake when last did you buy cairns products. Everyone is buying South African products. So how do you expect local industries to survive. If the policy makers do nothing now about the imports we will find ourselves like the Tswanas. where everything is from South Africa and the only employment available will be retails, civil service and mining

  10. Beki January 9, 2013 at 11:49 am #

    discuss while you chew on your Lays

  11. wtf January 9, 2013 at 12:28 pm #

    MA LAYS ANONAKA VEDUWEE, DID NOT KNOW IT WOULD RESULT IN CAINES CLOSING

  12. Mupfana weBikini January 9, 2013 at 12:46 pm #

    Saka maonaka kurega vana moms vachindotenga boots dzemaChina ne peas kuSouth Africa zvoti urayira Bata, CAIRNS ETC.Some people are even bringing in cement nemarata, matiles nemawindow from South AFRICA IMAGINE?

  13. child January 9, 2013 at 12:55 pm #

    I know that Gweshe could not run that company because the guy is too corrupt ,with his IT department which is headed by an illusive manager who does not know anything except deals only. Guys you reap what you saw

    • SBG January 9, 2013 at 2:00 pm #

      Hmmmm I think you know something.

  14. innocent chinyemba January 9, 2013 at 1:11 pm #

    hezvoka izvo kasukuwere , rovera bhora mberi , you will make masupaprofits cause panoshanda business acumenship kumutsa company yadonha ndopatinoonera kushanda kwemapolicy enyu eindiginisation kaapa, macase study ndizvo

  15. SBG January 9, 2013 at 3:43 pm #

    Companies in Zimbabwe are failing simply because of bad management & their hefty packages & unnecessary luxuries they don’t wan to for go. Mostly it’s the executive & management that are liability, while the company goes on it’s knees. The best was they want reduce costs is to cut manpower that does production & even more earns the list.
    Redundant positions in management are maintained even when the co. is collapsing.
    The looting at Cairns is so gross. Some of the the management have actually built houses, started businesses & supported them through siphoning money from Cairns thru crooked deals.

  16. Tanga January 9, 2013 at 3:48 pm #

    I think we need a new breed of entrepreneurs with basic business ethics and strategic management principles across the board from the public sector to the private sector.

    • Blessing January 9, 2013 at 4:48 pm #

      I agree… they always think MBAs are the way to run an organisation (which is wrong).You only need Level-headed individuals to succeed,

      • John Moyo January 9, 2013 at 7:12 pm #

        Where is Dr Looter Kasukuwere with his indigenisation hogwash when all this is happening

  17. Funky January 9, 2013 at 9:58 pm #

    It must be pointed out the major shareholder at Cairns is the Reserve Bank. Cairns like any other companies need additional working capital to update its technology if it is remain competitive. Its known fact that Reserve Bank’s financial position is not very sound hence its ability to participate in recapitalise Cairns is nil. Yes there may be need to change faces in management but a casual look at management of most companies will reveal that most are ceos for life and treat these companies as personal fiefdoms.

  18. Adza January 9, 2013 at 10:09 pm #

    Indigenisation, indigenisation it should left the company.

  19. Chinja 4life January 9, 2013 at 11:48 pm #

    Izvoka maZimbo I think problems is now part of our life and if people who mess do not have the audacity to step down on their own from mukuru wenyika, ticjhienda kunana Gono and the whole host of these company executives hatisati tatanga kuchema i think tichachema misodzi yeropa kusvikira madhogi abuda nyanga. Itai zvenyu maZimbo haditi chikoro munacho. Corruption ndiyo iri kunyanya asi hapan action

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