East Africa: Uchumi Supermarkets Restructuring Wreaks Havoc on Region

uchumiThe rebuilding of Kenyan retailer Uchumi Supermarkets is turning out to be a reason for torment and anguish for suppliers, workers and property proprietors over the area. Uchumi has closed down operations in Uganda and Tanzania and scratch off arrangements to enter the Rwandan business sector.Mansour Ramadhan, an authority of Tanzania Industrial and Commercial Workers Union (Tuico), who has been allocated by the trade union to manage the matter, said that almost 460 laborers face joblosses after the retailer closed down its six outlets. The supermarket chain owes suppliers and proprietors more than Tsh3 billion ($1.5 million).

The retailer owes its suppliers Tsh2 billion ($1 million) and another Tsh1 billion ($0.5 million) in unpaid rent. This does exclude compensation back payments and advantages of staff individuals. “I know of a Tanzanian agent looking for recoup about Tsh100 million ($50,000) from the grocery store chain,” said an authority of the organization. Uchumi additionally owe the national power wholesaler Tanesco a great many shillings in unpaid power bills.

The outlets at Quality Center, Segerea, Makumbusho, Shekilango Business Park, Mbezi Beach and Kilimanjaro Commercial Complex shut two weeks back when the new CEO, Dr Julius Kipng’etich, declared that the firm was hauling out of Tanzania and Uganda to stem loses caused in the course of recent years. Tanzania Horticultural Association (Taha) says that the up and coming way out of Uchumi from Tanzania is a hit to the business.

In Uganda, it is assessed that more than 100 organizations have been influenced by Uchumi’sceasure, with a large portion of them owed a huge number of shillings in unpaid bills for products and services, combined with rent, power bills and expenses and in addition workers’ government managed savings commitments.

Influenced firms partnered with the Uganda Manufacturers Association (UMA) owed colossal sums, between Ush15 million ($4,101) and Ush200 million ($54,677).However the figure could ascend as more organizations report unpaid receipts, as indicated by Lawrence Michael Oketcho, UMA’s strategy and support chief.

Ugachick Limited, a main Ugandan maker of new chicken, has supplied Uchumi for as long as six years yet confronted a few difficulties in handling installments. In spite of the fact that the organization modified payment terms through lessening of credit days the circumstance stayed desolate.