Bulawayo City Council’s privatised Ingwebu Breweries requires $20 million in fresh capital for retooling and is looking for potential investors, acting managing director Johannes Gumbo has said.
BY MTHANDAZO NYONI
Ingwebu operated as a wholly-owned business entity of the BCC through Bulawayo Municipal Commercial Undertaking from 1996 to 2016.
Following persistent losses, including $2 million reported in the nine months to September 2016, BCC resolved to privatise the brewery.
The decision to bring in new investors was aimed at boosting competitiveness, according to Gumbo, who was speaking during a council’s 2019 budget consultative meeting last week.
“The challenge which has faced Ingwebu over the years is one of retooling. We have got a beautiful plant, but it’s an old plant.
So, clearly, the industry that we are in is a very competitive industry.
The competitor is well tooled,” Gumbo said.
The brewery has operated under difficult conditions and stiff competition, in an industry dominated by Delta Corporation’s Chibuku brands.
“This is what is being addressed.
As of now Ingwebu is a private company, the idea being to enable the organisation to raise funds for retooling.
The process has started, we are in the process of scouting for investors, but the thrust really is that Ingwebu is a very powerful brand and as an organisation we would want to leverage on that as we look for investors.
We don’t want to look for investors from a position to replace Ingwebu,” he said.
Gumbo said the company needed just under $20 million capital injection to bring the business to viability.
But early this year, former mayor Martin Moyo said anything less than $100 million would not help revive the company.
“So as things stand now, we are looking for investors.
Yes, in the last two years or so we had problems, making losses, but for now I will say the business is stable and the thrust for now maybe until end of 2018 is at least break even and 2019 going forward we will have to make profit and declare dividends for Bulawayo,” Gumbo said.
Speaking at the same meeting, Bulawayo town clerk Christopher Dube said the company was ready to take on private parties.
“Let me also indicate that Ingwebu whilst it has not declared a dividend for some time now, but I want to assure you, Ingwebu is not a dying company.
Ingwebu now is at least breaking even and making a bit of some profit.
With the progress that is there on the ground, Ingwebu will at some point declare a dividend,” he said.