Banknote printer De La Rue’s additional Sh258m pain in Kenya exit
Banknote printer De La Rue has spent an extra £1.3 million (Sh258.6 million) to put off employees, write off property and pay attorneys , bringing the cumulative spending on closing down operations of its Nairobi unit to £13.9 million (Sh2.77 billion).
The worldwide agency, which in January 2023 suspended banknote printing operations within the nation owing to low demand, says within the newest buying and selling replace that the extra price was made up of £1.1 million (Sh218.8 million) for impairment of property, £0.2 million (Sh39.78 million) redundancy fees and £0.1 million (Sh19.89 million) on different prices.
“Since this [exit from Kenya] programme commenced, £13.9 million of prices have been incurred in relation to this. Minimal additional prices are anticipated in relation to this programme within the monetary yr 2024,” stated De La Rue in a buying and selling replace masking six months to the tip of September 2023.
De La Rue, which was using about 300 folks in Kenya via its subsidiary De La Rue Kenya EPZ Restricted, had within the yr ended March 25, 2023 used £5.5 million (Sh1.09 billion) on redundancy fees, £4.9 million (Sh974.7 million) to write down off property, plant and tools and £2 million (Sh397.8 million) to impair stock.
The agency additionally incurred a £2.5 million (Sh497.3 million) cost for redundancy and authorized charges in relation to restructuring initiatives in each the forex and authentication divisions to right-size the divisions for future operations.
De La Rue has been printing notes for Kenya via the native three way partnership that’s 40 per cent owned by the Kenyan authorities, however determined to droop its notes printing line and cheques enterprise after Central Financial institution of Kenya advised it no extra orders could be coming for no less than 12 months.
The Kenyan unit made a lack of £0.1 million (Sh19.89 million) within the half yr interval ended September 2023, in contrast with a £0.5 million (Sh99.46 million) as income shrank from £10.8 million (Sh2.15 billion) to £0.2 million (Sh39.78 million).
De La Rue in late 2018 received an £85 million (Sh16.9 billion) tender to design and manufacture Kenya’s new forex technology notes because the nation moved to take away the faces of people from its forex.
Declining world demand
The winding down of Kenyan operations means De La Rue will now be left with three banknote websites —UK, Malta and Sri Lanka— down from 4 originally of the yr and 5 in 2020, highlighting the declining demand for banknotes globally as digital transactions acquire traction.
The agency has been finishing up substantial enlargement in its Malta facility and is eyeing organising forex printing models that are anticipated to be prepared by 2025.
De La Rue has been working in Kenya for over 25 years from the place it served different markets akin to Tanzania, Uganda, Zambia and Rwanda.
