Banknote printer De La Rue has spent an extra £1.3 million (Sh258.6 million) to put off employees, write off belongings and pay legal professionals , 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 value was made up of £1.1 million (Sh218.8 million) for impairment of belongings, £0.2 million (Sh39.78 million) redundancy expenses 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 12 months 2024,” mentioned De La Rue in a buying and selling replace masking six months to the top of September 2023.
De La Rue, which was using about 300 folks in Kenya by its subsidiary De La Rue Kenya EPZ Restricted, had within the 12 months ended March 25, 2023 used £5.5 million (Sh1.09 billion) on redundancy expenses, £4.9 million (Sh974.7 million) to put in writing off property, plant and gear 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 by 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 informed it no extra orders can be coming for at the very least 12 months.
The Kenyan unit made a lack of £0.1 million (Sh19.89 million) within the half 12 months 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 international 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 12 months and 5 in 2020, highlighting the declining demand for banknotes globally as digital transactions achieve traction.
The agency has been finishing up substantial enlargement in its Malta facility and is eyeing establishing forex printing items 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 comparable to Tanzania, Uganda, Zambia and Rwanda.
