(Nairobi) – Unga Group, a publicly listed food processor, has disclosed that it paid KSh 13.25 million to its former Managing Director, Joseph Choge, for the termination of his contract in the financial year ending June 2024. The payment was part of his total remuneration of KSh 56.2 million, which also included a salary of KSh 43 million.
Mr. Choge left the company on May 31, 2024, after serving for just over two and a half years. He had joined Unga Group in December 2021. However, the company did not provide specific reasons for his departure. Despite his exit, the company has faced financial challenges, reporting losses on revenues exceeding KSh 23 billion.
Following Mr. Choge’s departure, Unga Group appointed James Nyutu, an insider with extensive experience at the company, as the acting managing director. Mr. Nyutu had previously served as the finance and ICT director for Unga Group and its subsidiaries since joining the company in 2013. His appointment as acting MD took effect on June 4, 2024.
In its latest annual report, Unga Group revealed that it had reduced its workforce from 298 to 285 employees during the year ending June 2024. This included cutting 35 management and administrative positions, alongside one production role. However, the company did hire 21 new employees in sales and distribution to support its operations.
A key milestone for the company was the restructuring of its leadership team in December 2023. Unga Group’s chairperson, Isabella Ochola-Wilson, described this restructuring as essential for streamlining operations and enhancing decision-making efficiency. According to her, the changes were not only focused on cost savings but were also aimed at empowering employees and improving overall business performance.
The restructuring came at a financial cost, with redundancy expenses rising significantly from KSh 32.9 million to KSh 120.1 million during the year. Meanwhile, the company’s total salary and wage expenses fell by 17.4%, dropping from KSh 774.2 million to KSh 639.1 million.
Unga Group has been gradually reducing its workforce over the past few years. In the financial year leading up to June 2022, the company had 400 employees, and this number has continued to decrease in subsequent years.
Despite these challenges, Unga Group managed to reduce its annual losses for the year ending June 2024. The company reported a loss of KSh 669.5 million, a significant improvement from the previous year’s loss of KSh 959.3 million. This reduction in losses was attributed to improved operational efficiencies and a one-time foreign exchange gain from a strengthening Kenyan shilling, which helped lower finance costs.