adminBianca Mlilo/Kiyapili Sibanda, Business Reporters
THE National Bakers’ Association of Zimbabwe (NBAZ) says 2016 was a difficult year for the sector as several small players closed shop.
The situation was worsened by the cash crisis since March 2016 and the intense competition with big corporates who enjoy economies of scale.
Amid falling disposable incomes, demand for bread has also steadily declined over the years. Statistics show that Zimbabwe consumes about 850 000 loaves a day from one million in 2015 and 1,8 million in 2014.
NBAZ president Mr Givemore Mesoemvura said the small to medium bakeries were the worst affected. Between January to May 2016, 15 bakeries shut down in the country due to operational constraints facing the sector, he said.
Mr Mesoemvura said the main challenges in the industry were lack of working capital and ageing equipment.
“The operating environment is worse especially for the small to medium operators. The cash shortages have had a very negative impact on our businesses,” he said.
“Competition has intensified as can be seen through promotions and advertising, which have taken root in the industry. The last quarter we have seen prices of flour increasing from $27 to $32 for 50kg bag. Imported flour worked as a barometer on price and quality on locally milled flour.”
The Grain Millers Association of Zimbabwe in November vehemently denied the claims that they had increased the price of flour.
Moving forward to this year, Mr Mesoemvura said the promulgation of protectionist policies were commendable but called for consultations within the value chain for optimum efficiency.
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