6 July 2006

Kenya: Del Monte Staff Get 20 Percent Pay Rise

Nairobi — Some 3,000 employees of a canned foods company will receive a 20 per cent increase in basic salary and other benefits under a new collective bargaining agreement.

The agreement for Del Monte Kenya workers covers two years, but has been backdated to July 2005. This means that the employees will get the first 10 per cent salary increment arrears immediately, while the final 10 per cent pay rise is effective from this month.

The lowest paid worker will now receive Sh7,898 monthly up from Sh6,610 while the highest paid worker will get a hike from Sh19,987 a month to Sh24,185.

Del Monte Kenya is owned by Del Monte Royal, one of several Del Monte companies formed after the sale in 1965 of the US Del Monte Corporation. Housing allowance has also gone up from Sh600 a month to Sh700 for seasonal workers and to Sh1,000 a month from Sh850 for permanent employees. Each employee will now receive Sh550 a month in meal allowance up from Sh465.

Employees will now get two days extra in their annual leave to 32 days, and an increased leave travel allowance of Sh550, from Sh470.

However, Del Monte managing director Carlos Mejia said the pay rise was as a result of a balancing act because the company is facing strong competition from low-cost producers from Thailand and the Philippines.

"Our production costs are much higher than the Asian producers, as we pay higher wages, our inputs costs are much higher and we follow stricter agricultural practice guidelines," Mr Mejia said on Monday, during the signing ceremony in Nairobi between the company and the Kenya Plantation and Agricultural Workers Union.

To remain competitive in the global market, the company has to maintain the quality of its products, and increase worker productivity, he said.

Salaries are eating up revenue, and increasing products prices is not an option, hence the need to boost productivity, said Del Monte's acting human resources manager Nicholas Wanambisi. "We believe the union will support the management by telling members to work harder," he said.

The company has been going through management changes, after its shareholding changed in 2004, and Mr Mejia said they anticipated growth to be propelled by the Kenyan business. "Kenya will continue to be a supporting pillar in production for Del Monte Europe," he said.

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