Chronicle Editor
Judith Phiri, Business Reporter
BULAWAYO’S diversified manufacturing powerhouse, Arenel Foods (Private) Limited, has made a significant leap forward by installing new production lines for biscuits and pasta, a project valued at US$2,5 million.
This latest development is part of the company’s ambitious expansion strategy, which has seen over US$8 million invested over the past five years.
The firm has expressed optimism about the prevailing economic stability since the introduction of Zimbabwe Gold (ZiG) in April this year.
Under the Second Republic led by President Mnangagwa, Arenel Foods has capitalised on an improved investment climate, launching a variety of new products tailored to market demands while enhancing production efficiencies through modern technology.
As a leading example of Bulawayo’s re-industrialisation efforts, Arenel Foods has evolved from its traditional focus on sweets and biscuits to explore new product lines, recognising burgeoning business opportunities in the country and simultaneously doubling its workforce.
Other products include mealie-meal, salad cream, corn snacks, instant porridge, soups, cordials, mahewu, carbonated soft drinks and bottled water. Responding to questions from Sunday News Business, Arenel Foods Compliance officer, Mr Stephen Ncube confirmed that they have installed the new production lines.
“We have successfully installed new production lines for biscuits and pasta, with the exception of the bread production line, which is still pending. Although the new production lines are installed, they remain non-operational due to inadequate power supply,” he said.
“To address this, the power utility company has asked us to acquire specific equipment to support their provision of sufficient power, which will allow us to commission the lines.”
He said the cost of the additional equipment would see them investing further plus or minus US$150 000, while given the substantial financial implications, they have engaged the power utility company on a viable financing model.
The company exports products to countries such as South Africa, Botswana, Namibia, Zambia, Malawi and Mozambique.
Mr Ncube said rampant smuggling of almost all products they manufacture was causing significant harm to the business and the economy.
He said to counter this challenge, they have adopted various strategies such as advocating for Government policies and regulations that support local industries, leveraging technology to improve efficiency and expanding product lines to reduce dependence on a single market.
Mr Ncube said: “Although we face significant challenges, we remain hopeful that the business environment will become more conducive to growth. The relative stability that has emerged since the introduction of the structured currency is an encouraging sign of potential progress.”
The new currency, Zimbabwe Gold (ZiG) introduced in April has stabilised the exchange rate and tamed inflation, with the business community lauding the development.
After years of sustained or intermittent hyperinflation and currency volatility, companies are now able to make forecasts with greater certainty due to the more stable environment.
The exchange rate stability and the clampdown on inflation have created a more conducive and predictable environment for sustainable business operations.
As a result of prudent monetary management, the ZiG month-on-month inflation rate was -0,1 percent in July 2024, shedding 0,1 percentage points on the June 2024 rate of 0,0 percent; while the US dollar month-on-month inflation rate was -0,1 percent, gaining 0,2 percentage points on the June 2024 rate of -0,3 percent.
The weighted month-on-month inflation rate, which includes both ZiG and the US dollar, was -0,1 percent in July 2024, gaining 0,1 percentage points on the June 2024 rate of -0,2 percent.
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