Clover has moved to dispel as incorrect Business Report’s story about job losses at its operations if the multibillion-rand merger with Israel-based Milco SA is approved by the Competition Tribunal. Photo: Supplied

JOHANNESBURG – Clover has moved to dispel as incorrect Business Report’s story about job losses at its operations if the multibillion rand merger with Israel-based Milco SA is approved by the Competition Tribunal.

On Wednesday, BR reported that a total of 657 existing jobs will be on the line in the next two years if Milco’s acquisition of JSE-listed Clover industries is approved.

The proposed acquisition is opposed by labour unions, the Food and Allied Workers Union and the General Industry Workers Union (Giwusa), who have 2 600 and 2 000 members at Clover, respectively.

In a statement on Wednesday, Clover said that the job losses arising as a result of its Project Sencillo were not related to the Milco transaction.

Project Sencillo involves the rationalisation of Clover's production platforms and consolidation of its distribution operations in order to improve the utilisation and efficiencies of assets, including factories, manufacturing lines, warehouses and transportation. 

It is being rolled out in phases and has been an ongoing project at Clover over the years to help it to optimise its assets and productivity.

Phase 1 of Project Sencillo was completed in mid-2017. Clover said that Project Sencillo would continue irrespective of whether or not the proposed Milco transaction is implemented.

It said the impact on employment on Phase 2, which will take approximately two to five years to roll out, will be mitigated to the extent possible by way of alternative employment within the company’s businesses.

“Although Clover has been very clear to the Competition Commission and the Competition Tribunal on its position that any job losses arising from Project Sencillo are not related to the Milco transaction,” it said.

“Both Clover and Milco are sensitive to the economic and social realities of South Africa and have thus actively engaged in a positive manner about their proposed actions to minimise the effects of Project Sencillo on employment.”

As a result, Clover and Milco said they have agreed to limit the net effect of retrenchments arising from Phase 2 of Project Sencillo to a maximum of 277 positions. 

“Clover is committed to keeping the number of retrenchments arising as a result of Project Sencillo as low as practically possible; not to retrench any employees as a result of the completion of Project Sencillo for a period of two years from the date of approval of the Milco transaction,” it said.

“Clover is committed to undertake, over a period of five years from approval of the Milco transaction, to create 550 new permanent employment positions at Clover through the expansion of Clover's Masakhane Project. 

“Therefore, in summary, having regard to the above undertakings, the transaction will have a net positive effect of 273 employment opportunities in the South African economy.”

BUSINESS REPORT