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Press Corporation Limited downplays fears of job cuts

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Press Corporation Limited has dismissed fears of job cuts at Carlsberg Malawi following change of shareholding from Carlsberg Breweries AS of Copenhagen to Castel Group.

Carlsberg sold its 59.48 percent stake in the company to Castel after PCL, which owns 39.65 percent in Carlsberg Malawi, failed to exercise pre-emptive rights to buy Carlsberg Breweries shares.

PCL Group Chief Executive Officer, Mathews Chikaonda, confirmed that the company has no plans to lay off staff but that it is working on strategies to build more capacity following the creation of a bigger market with the coming in of Castel as new shareholder.

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According to Chikaonda, the Malawi plant, which was disposed off, was the only one Carlsberg Breweries owned in Africa while Castel has operations in over 130 countries globally, a good number of which are on the African continent.

“We are looking at increasing capacity not cutting down. Malawi now has a chance to enter a bigger market,” he said.

Chikaonda said previously, Carlsberg Breweries was only able to produce 350 hectolitres of beer annually but now anticipates surpassing the figure with Castel’s capacity of 60 million hectoliters per annum.

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“At PCL we are very keen to invest in people and build capacity. There will be no job losses because nothing will change in Malawi.”

Chikaonda also downplayed prospects of buying back the shares from Castel arguing that PCL is focusing on increasing both customer and shareholder value.

“The issue is not shareholding. Companies are changing hands on a daily basis but what matters is the value that consumers get from your products and the returns to shareholders.”

The Competition and Fair Trading Commission (CFCT) earlier said it cannot say whether or not the transaction will result in job losses until it completes its assessment procedures.

CFTC has, however, commended the parties involved in the transaction for showing commitment to comply with the Competition and Fair Trading Act, a law that governs the regulation of mergers and acquisitions in Malawi.

An economic commentator, Ben Kalua, said job loss risks will only come into play if the new shareholder, Castel, decides to adopt a capital intensive business strategy where the owners invest heavily in machinery and technology.

“There is a possibility that Castel will use the same labour ratios which were used by Carlsberg considering that the two [Carlsberg and Castel] come from similar developed market economies. But if in the event that people are retrenched, then obviously, that will have negative effects on communities,” Kalua said.

Carlsberg has exited Malawi after operating in the country for 49 years. The new shareholder, Castel Group, is an internationally recognised name, with presence in over 130 countries across the globe.

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