Tata Chemicals Magadi Limited (TCML) announces proposal to mothball its Premium Ash Magadi (PAM) plant operations
Magadi: Tata Chemicals Magadi today announced that it proposes to mothball its PAM plant which was established in 2006. The restructuring proposal of this facility follows a comprehensive review of alternatives over the years to improve plant performance such as efforts to reduce energy cost, operating effectiveness and efficiencies including injection of additional investment and utilisation of various experts. PAM accounts for about 70% of the overall TCML’s energy consumption. The steep rise in global energy prices primarily factored into the decision to secure the future of TCML’s remaining soda ash and salt business and associated jobs. It is anticipated that the proposed mothballing will happen during the second Quarter of the 2014/15 Financial Year.
The proposed mothballing, which is necessitated principally by high energy costs, will impact about 200 permanent employees. TCML will in this process fulfil its legal and contractual obligations to the impacted employees and intends to commence consultations with the affected employees and the union towards ensuring that the employees who may be potentially impacted are prepared for the eventuality of this process and that they receive due compensation for valuable services rendered with the organisation. A consultation & counselling team has been set up for transition assistance with immediate effect for the coming months.
Managing Director, Eng. Jack Muchira Mbui said, “The proposal to mothball TCML’s PAM production plant was a painful one, precipitated by the high energy costs that have overwhelmed the viability of this plant. Despite exploring various other options over the last 8 years, it is regrettable that TCML has been unable to mitigate sufficiently the serious impact of the energy costs on its business. Restructuring the company would aid in securing employment of the remaining colleagues and provide a sustainable presence in Kenya. Thanks to the backing of many stakeholders, our employees and the shareholder, TCML now looks to the future opportunity to grow its business in existing and new markets and to secure its presence in Kenya for the long term.”
“We thank all our stakeholders and employees in particular for playing a vital and constructive role in the company’s efforts to stabilise its business as it seeks opportunities for growth” added Eng. Mbui. “TCML continues to work closely with stakeholders such as the Government, which understands the Company’s energy challenges. The energy challenge which TCML has faced is an example of how the state of the Kenyan energy situation seriously threatens the ability of energy intensive manufacturing companies to compete on the world stage. All stakeholders need to work hard to address these challenges to avoid further damage to the manufacturing base.” Eng. Mbui further added.