ZIMBABWE – The operating capacity of the Zimbabwe’s baking industry has fallen to 50% due to subdued demand for its products, an industry official has said.
National Bakers’ Association of Zimbabwe president Givemore Mesoemvura told NewsDay that the baking industry was operating at sub-optimal capacity.
“The industry is stable, but needs retooling to overcome inefficiencies,” Mesoemvura said.
“We are operating at sub-optimal capacity [and] current capacity is 50% due to subdued demand for our products because of the non-performance of the macro-economic environment, reduced disposal incomes and liquidity, therefore, reduction in demand for bakery products not withstanding cheap imports and power outages.”
Mesoemvura said things were increasingly becoming strenuous and the cost of doing business for small to medium bakers was too high causing them to operate below break-even point.
“There are no new entries in the industry except for those who would have closed reopening,” he said.
He said the fall of the South African rand was giving competitive advantage to that country’s exporters into Zimbabwe as their products become cheaper, rendering ineffective the tariff protection effected by government.
The current rate between the rand and dollar is hovering at R14:$1.
Mesoemvura said as an industry, they needed to invest in new technology and equipment.
“So we need around $200 million for that long term at low interest rates than what is available now,” he said.
The association has a membership of about 260 bakers.
The bakery industry employs 3 500 people and has shown downstream value chain effects that accrue to farmers, yeast and fat producers, millers and the government through fiscal revenues.
At its peak, the bakery industry employed more than 6 000 people and utilised over 400 000 tonnes of wheat supporting local farmers and millers.
Zimbabwe currently has more than 257 operational bakers with Lobels and Bakers’ Inn being the biggest two.