FBC Holdings has requested all its suppliers and service providers to effect a 20% discount on the current contractual obligations and future businesses as it moves to contain costs due to the harsh operating environment.
BY BUSINESS REPORTER
In a statement, group chief executive officer John Mushayavanhu said the move will go a long way in allowing the company to maintain relationships going forward without straining viability prospects.
“As you are no doubt aware, our operating environment is under siege with persistent company closures, job cuts, unsustainable operating costs, industry wide high non-performing loans and subsequently major declines in revenues across all the businesses. Consequently, budgets have been slashed drastically in order to remain viable,” Mushayavanhu said.
FBC Holdings becomes the second Zimbabwe Stock Exchange-listed entity to ask suppliers for a review in prices. Last month, Econet Wireless Zimbabwe asked its local and international suppliers to cut prices by at least 15%, failure of which they would be blacklisted. It also cut the salaries of its workers by 20%.
“We ourselves were forced to lower our prices by 40%, so if our suppliers don’t cut their own prices, we will go out of business. We do not think 15% is too much to ask others for,” Econet chief executive officer Douglas Mboweni said.
Cost-cutting has become the buzzword within corporates as they try to stay afloat in the harsh economic environment. This has seen companies shedding “excess” labour riding on the July 17 Supreme Court ruling that allows employers to terminate workers’ contracts on three-months’ notice. Over 25 000 workers have been retrenched as a result.
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Econet reported last week that it had managed to save $70 million through cost-cutting measures.
Mboweni said while no one enjoyed to cut salaries given the current economic environment, it was a better option than wholesale retrenchments.
