“The restructuring became necessary as Pioneer Foods, a listed public entity under continuous scrutiny for comparative competitive performance, is feeling the effects of the difficult market conditions which resulted in a limited and a combatant environment,” the company said in a statement.
Pioneer Foods is one of the largest producers and distributors of a range of food, beverages and animal food product in South Africa. Its manufacturing and production brands include Sasko, Bokomo Foods, Quantum Foods and the Ceres beverages company.
“The Pioneer Foods board is aware of its responsibility to grow revenues and profitability ahead of the market, expand margins, stimulate innovation and brand equity and enhance return on capital invested,” the company explained.
According to reports, Pioneer Foods will retrench over 1,000 employees, with a number of them being placed on early retirement, retrenchment or placed into vacant positions for a lower salary.
The restructuring is a part of the company’s plans of resetting of the cost base, revitalisation of core brands and to improve efficiencies and effectiveness.
“The [objective] of the restructuring is to be leaner and highly responsive to consumer needs. The ‘people cost reduction’ initiative is but one of many initiatives across the value chain to deliver against the aforementioned,” the company said.
The restructuring plans will be under the company’s new CEO Phil Roux.
“It is regrettable that some employees are affected in this process. Pioneer Foods is acutely aware of its responsibility to grow revenues and market share, expand margins, and enhance return on capital invested,” said Roux in the statement.
“The new business model and concomitant cost and efficiency benefits thereof, will no doubt better position the company to compete more effectively for the benefit of all stakeholders.”