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Bianca Mlilo Business Reporter—
FIFTEEN bakeries have shut down in the country since the beginning of this year due to operational constraints facing the sector, the National Bakers Association of Zimbabwe (NBAZ) has said. Players in the confectionery industry have been facing a myriad of challenges mainly lack of working capital and ageing equipment.

Last year, the NBAZ revealed that the sector needed about $150 million minimum working capital to remain afloat. Those who had secured loans and funding from local banks and the Distressed Industries and Marginalised Areas Fund (Dimaf), have managed to pull through although they are still operating below capacity.

NBAZ president Givemore Mesoemvura told Chronicle Business that “times are hard for the baking industry”.

“We’ve lost about 15 percent production in comparison to last year and we’ve had small to medium bakeries shutting down. This year alone from January to April, 15 bakeries have shut down,” said Mesoemvura. “The baking industry is ailing and previously unknown players have resorted to advertisements on radio to market themselves.” He said bread demand has decreased to about 850,000 loaves a day.

“The daily demand for bread has been steadily declining over the years. Last year bread demand stood at one million loaves a day, while in 2014 it was at 1,8 million. “This is due mostly to lack of disposable income, the current cash shortages and the public losing confidence in the banking sector,” said Mesoemvura.

Experts have linked loss of disposable incomes to massive job cuts experienced last year when companies offloaded thousands of workers taking advantage of the July 2015 Supreme Court ruling which gave employers the greenlight to fire workers on three months’ notice. At its peak, the bakery industry employed more than 6,000 people and utilised over 400,000 tonnes of wheat supporting local farmers and millers.

According to the Confederation of Zimbabwe Industries (CZI)’s 2015 industry survey, average capacity utilisation for the manufacturing sector stands at 34 percent. The challenges facing local industry have been worsened by the influx of cheap imported finished products as well as high production costs which compromise the competitiveness factor.

NBAZ is the baking industry employer body which has been in existence since 1940. Zimbabwe presently has about 240 operational bakeries, with Lobel’s and Bakers’ Inn being the biggest two.

The relationship between the baking industry and millers has been negatively affected by an underperforming agriculture sector. Given the low wheat production over the years, the industry has had to rely on flour imports.