Lobels acquires equipment worth $5,8mln

HARARE, 30 July, 2013 (The Source) – One of the country’s biggest bakeries, Lobels Bread Holdings, has acquired equipment worth $5.8 million  to boost production as the company grapples with a $19 million debt that forced its closure two years ago.
Lobels chairman, Casper Chibanga told The Source that the bulk of the equipment, acquired from South Africa last year had arrived in the country.
“As a result of the technologically advanced equipment that we have acquired the quality of our product is going to improve.  The equipment is semi-automated hence there will be no product handling,” he said.
He said the Harare bakery had increased capacity from last year’s 100 000 loaves per day to 200 000 while Bulawayo had increased from 50 000 to 100 000 loaves.
“We are just awaiting the final installation of some equipment to get us to 250 000,” he said.
Its closest competitor, Baker’s Inn which recently commissioned a $16 million plant is producing 400 000 loaves a day.
Chibanga said the bread-making company was in the process of acquiring a confectionery plant for its Harare bakery to be commissioned by November this year.
The company said it had commissioned plant 9 and was getting “maximum throughput as previously envisaged.”
Turning to the repayment of the $19 million debt, which brought the company to its knees two year ago, he said, “We have managed to pay each of the trade creditors the $20 000 due as per the scheme document and the issuing of debentures has been completed.”
Lobels commands a market 34.5 percent market share while Baker’s Inn has 40 percent.
He said plans were underway to roll out a retail chain next year for customer convenience.
“We would want our customers to access our products throughout the 24 hour cycle,” he said.
The company is also set to acquiring its own distribution fleet to ensure timeous delivery of its product and to compliment the plant capacity.
Lobels resumed operations last year after a consortium of local banks, once creditors of the firm injected $4.5 million after taking over the company which ceased operations in 2011 due to capital constraints.
The consortium – NMB, FBC, CBZ, Capital Bank and Metbank – under the vehicle Altiwave holds 100 percent shareholding of the Harare bakery and 90 percent of the Bulawayo bakery. The banks were owed $14 million which they turned into equity while the company’s total debt stood at $19 million.
Lobels Bread was founded by Lobels Brothers in Bulawayo in 1957, and was bought by a consortium of businessman in 2002. At its peak, the Harare bakery used to produce 400 000 loaves daily and had a 40 percent market share which it lost in 2011.