Banknote printer De La Rue has spent an additional £1.3 million (Sh258.6 million) to lay off staff, write off assets and pay lawyers , bringing the cumulative spending on closing down operations of its Nairobi unit to £13.9 million (Sh2.77 billion).
The global firm, which in January 2023 suspended banknote printing operations in the country owing to low demand, says in the latest trading update that the additional cost was made up of £1.1 million (Sh218.8 million) for impairment of assets, £0.2 million (Sh39.78 million) redundancy charges and £0.1 million (Sh19.89 million) on other costs.
“Since this [exit from Kenya] programme commenced, £13.9 million of costs have been incurred in relation to this. Minimal further costs are expected in relation to this programme in the financial year 2024,” said De La Rue in a trading update covering six months to the end of September 2023.
De La Rue, which was employing about 300 people in Kenya through its subsidiary De La Rue Kenya EPZ Limited, had in the year ended March 25, 2023 used £5.5 million (Sh1.09 billion) on redundancy charges, £4.9 million (Sh974.7 million) to write off property, plant and equipment and £2 million (Sh397.8 million) to impair inventory.
The firm also incurred a £2.5 million (Sh497.3 million) charge for redundancy and legal fees in relation to restructuring initiatives in both the currency and authentication divisions to right-size the divisions for future operations.
De La Rue has been printing notes for Kenya through the local joint venture that is 40 per cent owned by the Kenyan government, but decided to suspend its notes printing line and cheques business after Central Bank of Kenya told it no more orders would be coming for at least 12 months.
The Kenyan unit made a loss of £0.1 million (Sh19.89 million) in the half year period ended September 2023, compared with a £0.5 million (Sh99.46 million) as revenue shrank from £10.8 million (Sh2.15 billion) to £0.2 million (Sh39.78 million).
De La Rue in late 2018 won an £85 million (Sh16.9 billion) tender to design and manufacture Kenya’s new currency generation notes as the country moved to remove the faces of individuals from its currency.
The winding down of Kenyan operations means De La Rue will now be left with three banknote sites —UK, Malta and Sri Lanka— down from four at the beginning of the year and five in 2020, highlighting the declining demand for banknotes globally as digital transactions gain traction.
The firm has been carrying out substantial expansion in its Malta facility and is eyeing setting up currency printing units which are expected to be ready by 2025.
De La Rue has been working in Kenya for over 25 years from where it served other markets such as Tanzania, Uganda, Zambia and Rwanda.
