Lobels reopens

working capital.
Although the amount could not be immediately established, sources said the company recently struck a deal with an unnamed equity partner, who invested in the business.
Lobels, with its 250 000-loaves-a-day capacity, suspended operations in June due to operational challenges. These included working capital constraints and a huge debt overhang.
The situation worsened in the past two years as a result of an alleged US$6 million fraud believed to have been masterminded by top managers, some of whom have since resigned.

“We have reopened the Harare factory,” said an official. “although we have started at a low level. We are producing between 15 000 and 20 000 loaves a day since we are still gauging the market.
“But we should be able to increase production in the next few weeks.”

EARLIER REPORTS ON LOBELS

No comment could be obtained from Lobels resident director Retired Brigadier David Chiweza at the time of going to press yesterday.
The official said the company was targeting 100 000 loaves a day.

“We are quite happy with what we have achieved so far,” he said, “as this will give confidence to creditors and various stakeholders that we are working with.”
Lobels owes creditors about US$5 million and almost lost its key assets, which had been attached to settle the debts.

The auction of the assets was cancelled after the company struck a deal with creditors on how to pay off the debts.
The Lobels official said the company had so far retained half of its workforce and more workers would be retained as production increased,

Appearing before a Parliamentary Portfolio Committee on Industry and Commerce last week, Mr Paul Chapisa, the president of the Baking Industry Workers’ Union, said the intervention of the Government would go a long way in reviving the company.

The Zimbabwe Congress of Trade Unions advocacy officer, Ms Vimbai Mushongera, urged the same committee to institute proper investigations to ascertain areas of concern.
Lobels require a fresh capital injection to pay off debts, refinance working capital and, in the medium term, to acquire new state-of-the-art equipment.

Lobels was once the market leader in the baking industry. But as hard times descended, the bakery started losing its market share to competitors such as Bakers Inn and Proton Bakeries.
The company started operations in the late 1940s under the Lobels brothers. In 2002, a local consortium took over its operations. The consortium included Mr Livingstone Gwata, the chairman of the company, tourism guru Mr Herbert Nkala, Dr Burombo Mudhumo, Mr Chiweza and Mr Fred Mtanda.