Banknote printer De La Rue has incurred expenses of Sh2.7 billion (£15.1 million) as it shuts down its operations in Nairobi due to a decline in currency and cheques printing business. The multinational company, which has been printing notes for Kenya through a local joint venture, announced the closure of its notes printing line and is in the final stages of winding down the cheques business. This decision has resulted in the laying off of around 300 employees.
In its trading update, De La Rue disclosed that it has used £5.5 million (Sh977.1 million) for redundancy charges, £4.9 million (Sh870.5 million) to write off property, plant, and equipment, and £2 million (Sh355.3 million) to impair inventory. The company recorded an exceptional charge of £12.6 million for the financial year 2023 due to the review of its business in Kenya. Additionally, it incurred a £2.5 million (Sh444.15 million) charge for redundancy and legal fees associated with restructuring initiatives in the currency and authentication divisions.
De La Rue had previously announced the closure of its operations in Kenya in January, following confirmation from the Central Bank of Kenya that there would be no offers for printing banknotes for at least the next year. The company also mentioned that its operations in the authentication division, which handles products like bank cards and identification cards, are also being phased out.
These expenses resulted in De La Rue Kenya reporting a net loss of £7.3 million (Sh1.29 billion) compared to a net profit of £2.2 million (Sh389.9 million) in the previous year. The Treasury, which owns a 40 percent stake in the company, will experience a loss of £2.9 million (Sh513.97 million) compared to a profit of £0.9 million (Sh159.5 million) in the previous year. Revenue from De La Rue’s Kenya operations dropped by 45 percent, indicating the impact of reduced note printing and authentication business.
De La Rue will now operate with three banknote sites in the UK, Malta, and Sri Lanka, down from four at the beginning of the year, reflecting the declining demand for banknotes globally due to the growing popularity of digital transactions. The company has been expanding its facility in Malta and considers it a potential replacement for the capacity lost in Kenya if market conditions are favorable.
With over 25 years of presence in Kenya, De La Rue has served other markets such as Tanzania, Uganda, Zambia, and Rwanda. However, the winding down of its Kenyan operations comes alongside a Sh1.1 billion tax dispute with the Kenya Revenue Authority related to taxes paid between 2013 and 2017. De La Rue expressed disappointment with the court ruling and stated that its Kenyan subsidiary is preparing an appeal.
