THE National Bakers’ Association of Zimbabwe (NBAZ) says its members require a minimum of $25 million as working capital this year and expect to push up production to 65%, NewsDay has learnt.
BY MTHANDAZO NYONI
NBAZ president, Givemore Mesoemvura told NewsDay that the poor macro-economic environment coupled with dwindling disposable incomes had a negative impact on their performance last year.
“We are negotiating with banks to come up with innovative ways of supporting the industry by availing funds for working capital, order financing and other initiatives. As working capital, we need $25 million,” he said.
“The baking industry has been operating at 50% of capacity. We hope to achieve between 60% and 65% capacity utilisation by end of the first half of 2016.”
Mesoemvura said, bakers were producing approximately 700 000 loaves of bread and as is traditional, people consume less bread due to festive season and back to school pressures.
He said the industry had installed capacity of 1,8 million loaves.
A number of bakers are presently operating at 50% capacity due to other challenges such as competition from leading operators as well as subdued demand.
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.
The sector has a potential to spur industry and agriculture growth, employment creation and consumer satisfaction.
At its peak, the bakery industry employed more than 6 000 people and utilised over 400 000 tonnes of wheat, thereby supporting local farmers and millers.
In 2014, bread output grew by over 20%, mainly driven by capacity revamping and expansion of local bakeries.
Zimbabwe presently has more than 257 operational bakers, with Lobels and Bakers’ Inn being the biggest two.
The low disposable income has forced bakers to reduce the price of bread in a bid to stimulate demand.