Lobels set to double production

takes shape.
The bakery said output would rise from 35 000 loaves per day to 90 000 by end of September, after increasing from 15 000 during the first week of August this year when the company resumed operations.
It also plans to double production at its Bulawayo plant to 90 000 loaves during the same period.
The projected figures would see the country’s oldest bakery capacity utilisation growing to around 60 percent.
“The strategy is to increase production to 55 000 loaves per day as at September 1 2011 and growing to 90 000 loaves within the next four weeks at Harare Bakery and from 45 000 loaves per day to 90 000 loaves per day at the Bulawayo bakery within the same period,” said Lobels.
Lobels resumed operations last month after Kayseed Trading invested an undisclosed amount to restart production.
Lobels has kept under the wraps the identity of potential investors it had identified, but speculation has been rife that Kayseed could take a controlling stake of the firm. It is currently owned by a local consortium.
Kayseed has secured funds to pay creditors of up to US$30 000 “as well as partial settlement of the larger creditors subject to verifications of all the liabilities and the signing of legally binding documentation”.
Lobels will pay 138 creditors US$30 000 each, which will amount to about US$475 000. About 20 outstanding creditors excluding the banks, who are owed larger amounts, will be paid 30 percent of what they are owed and the balance will be converted into debenture.
Apart from creditors, Lobels owes banks approximately US$15 million.
“We shall shortly announce the location of a data room, to verify the amounts due to creditors.
“Creditors will be asked to verify their status as creditors of Lobels by producing necessary documents.”
The company almost lost its key assets, which had been attached to settle debts.
The auction was, however, cancelled after the company struck a deal with creditors on how to pay off debts.
“The developments taking place are positive and bring in confidence to workers and other stakeholders,” said one official who requested not to be named.
“Although we are yet to retain all our employees, we are hoping that by end of the year, everything would be in right places,” the official added.
Lobels used to be the market leader in the country’s baking industry but was forced to temporarily suspend operations due to mismanagement, misappropriation, undercapitalisation, shortage of critical working capital and reliance on expensive short-term debt.
When operating at full capacity, Lobels can employ more than 2 000 people.