BULAWAYO City Council’s commercial undertaking – Ingwebu Breweries – has been struggling to be profitable for quite some time and the venture needs massive capitalisation to stay afloat.
Mayor Martin Moyo announced recently that the council needs $4 million to refurbish Ingwebu machinery and increase distribution vehicles.
As we reported yesterday, the traditional beer brewer has been failing to pay former workers’ pensions, while management is failing to increase workers’ salaries to $450 for the lowest paid employee due to low returns.
Obviously, the business environment has not been conducive for the past decade with accelerated company closures and massive job losses.
Bulawayo has borne the brunt of the economic collapse with several companies either relocating to Harare or closing down.
Ingwebu had to shut down or lease out outlets dotted around high-density suburbs as the lack of disposable incomes took a toll on its traditional customers.
Similar establishments such as Rufaro Marketing in Harare and Go Beer in Gweru failed to cope with the changing environment and were driven into bankruptcy.
However, this cannot be used to justify underachievement by Ingwebu. The brewer should be cushioning the local authority at a time when ratepayers are struggling to pay for services.
For a long time it has stuck to its traditional products and neglected innovation.
This has given companies such as Delta Corporation, also involved in sorghum beer brewing, an opportunity to thrive in limited competition.
Last year Ingwebu laid out plans to invest $500 000 in a plant to produce non-alcoholic beverages, but the project was not implemented when, the company failed to raise capital.
Plans to expand operations into the Midlands, Matabeleland North and South provinces last year also suffered a stillbirth.
The brewery in Hwange has been lying idle for several years and Ingwebu has indicated that it would go ahead and resuscitate it.
Council should prioritise the recapitalisation of Ingwebu not only to save jobs, but also to improve the local authority’s revenue streams.