Bakeries operate at 45 percent
THE National Bakers’ Association of Zimbabwe says capacity utilisation in the bakery industry has declined to about 45 percent from 55 percent last year due to the prevailing economic climate.
NBAZ president Mr Givemore Mesoemvura said the prevailing economic climate is one of the toughest the sector has ever faced with close to 20 small-medium bakeries having closed shop.
“The industry is operating at 45 percent. The competition has become intense. It’s now dog eat dog.
“The big have swallowed the small and the fight for shelf space in the market has reached extreme levels to the extent that it’s now reversing the gains of Government’s affirmative action that has been made so far,” he said.
“We’re more than able to meet national demand. Our installed capacity is 1,8 million loaves of bread and we’re producing 800 000 a day.”
The daily demand for bread has been steadily declining over the years. Now it is down to about 850 000 loaves a day. Last year demand stood at one million loaves a day, while in 2014 it was at 1,8 million.
He said the sector was also facing challenges in the procurement of raw materials, which are not locally available.
All raw materials used in bread-baking are not covered under Statutory Instrument 64 of 2016, which removes several goods that are locally manufactured and available from the Open General Import Licence.
Last year, NBAZ revealed that the sector needed about $150 million minimum working capital to remain afloat.
He said bakeries that managed to secure funding from local banks and the Distressed Industries and Marginalised Areas Fund have managed to pull through although they are still operating below capacity.
According to the Confederation of Zimbabwe Industries 2015 manufacturing sector survey, capacity utilisation stood at 34,3 percent. — @ BiancaMlilo