Lobels resumes operations

HARARE - Confectionery-maker Lobels Bread Holdings (Lobels) has resumed operations with its products expected to hit the market today.

Lobels, one of Zimbabwe’s oldest bakeries, suspended operations in August to pave way for refurbishment.
However, this was after operational challenges with the baker failing to pay creditors.

Ngoni Mazango, the group’s chief executive, told businessdaily yesterday that the company was back for good following a successful recapitalisation exercise and installation of new equipment.

“We have already put everything in place and by tomorrow (today) our bread will be hitting the market,” Mazango promised.

“The new bread that we are making now has the same original taste of Lobels that people were used to,” he added.

Although Mazango refused to shade more light into the quantity and volumes that the new equipment will produce, sources close to the development say production levels are expected to reach around 200 000 loaves a day.

Lobels was once the leading breadmaker in the country, but over the past few years the company was pushed to the brink of collapse by mounting debts.

At its peak, the firm produced about 300 000 loaves daily. But, there was a sharp decline in production due to inadequate funding for retooling and supporting operations. Competition also worsened the situation.

Before its closure, its Harare factory was producing 95 000 loaves while Bulawayo produced 45 000 loaves per day.

Mazango believes his company has the capacity to retain its lost market share, although the closure gave other bread manufacturers the opportunity to consolidate their position.

Lobels used to enjoy a 30 percent share of Zimbabwe’s 1,2 million loaves daily market.

“We have a lot of things in the pipeline and in the next few weeks you will be seeing a lot of activities in the market,” said Mazango.

In the past few years and well before the arrival of new investors, Lobels struggled with debt and had to close several times.

Last year, Gamster Petroleum sought to auction off some of the baker’s assets to cover a $125 000 debt for unpaid supplies.

It is believed the company has managed to survive because of the sheer resolve from creditors, especially financial institutions such as CBZ, NMB and Met banks, who are owed huge sums.

The financial institutions are owed a whopping $16 million, with NMB’s obligation alone standing at $4 million.
Lobels is owned by Ceuvost Services, a consortium of Zanu PF loyalists comprising former FBC Holdings Limited chief executive Livingstone Gwata, the banking group’s chairperson Herbert Nkala, CAPS Holdings chairperson Freddy Mtanda and David Chiweza.

The four hold about 25 percent shareholding each in the company.

Lobels was established some 60 years ago by the Lobel family in Bulawayo.

The Lobel family sold the bread-making business to the Nkala-led consortium just after the new millennium, but they retained the biscuit business. - John Kachembere

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