Bleak prospects for small bakeries

Tinashe Makichi Business Reporter
SMALL to medium bakeries in Zimbabwe face an uncertain future as high operational costs continue to affect viability while aggressive expansion by bigger players across the country has left them without a significant market.

Players in the industry told The Herald Business last week that some small bakeries had since closed shop due to challenges with regards flour availability and operational costs.

It is alleged that small to medium bakeries have also been failing to secure import permits for flour thereby forcing them to source on the local market at expensive and uncompetitive prices.

“The bakeries landscape is dominated by Lobel’s Bread, Bakers Inn and Proton Bakeries so generally most small bakeries have closed shop as they have failed to compete with bigger players.

“Small players have failed to access import permits for raw materials from Government where they have an opportunity to import a 50kg bag for $25. But due to the fact that we are failing to get such permits we end up looking for raw materials on the local market where we land a 50kg bag for $33 which is highly uncompetitive,” said Mr Jaire Ncube of Ocean Foods Bakeries.

He said added to the cost structure were high distribution and labour costs while generally the industry just like everywhere else feels the effect of low disposable incomes.

Nyaningwe Bakeries Gokwe branch manager Nobert Chihwayi concurred that small bakeries were facing numerous challenges.

“We are facing challenges which stem from the availability of raw materials. Power cuts have also been the biggest undoing. Our bakeries in Gokwe, Gweru and Masvingo rely mostly on generators and this naturally contributes to the cost structure” said Mr Nyaningwe.

Mutare based Golly Bakery’s finance director Mr Simon Musabayana said they are not being afforded opportunities to negotiate with utilities like ZESA Holdings and City Councils but the same opportunity has been afforded to bigger players. An official with the National Bakers Association of Zimbabwe who requested anonymity told The Herald Business that “In the past there were small bakeries in small towns to cater for their communities but all that has been disregarded by big bakeries who are now distributing their products from the bases either in Harare or Bulawayo. This has resulted in small or community bakeries closing shop due to stiff competition that has been brought to their door.”

Efforts to get a comment from National Bakers Association of Zimbabwe president Mr Givemore Mesoemvura were fruitless.

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