Ingwebu suspends aMahewu production

Ingwebu suspends aMahewu production
Published: 16 April 2017 (486 Views)


THE Bulawayo Municipal Commercial Undertaking (BMCU)-run Ingwebu Breweries has suspended its non-alcoholic sorghum mahewu production after raising a paltry $6 143 in the fourth quarter to December which was 91 percent down compared to the budget.

Further, the company admits to facing a number of challenges that are threatening its going concern status hence has tabled cost cutting measures that include salary cuts and retrenchments.

The company started producing mahewu in February 2015 after investing more than $500 000 as a way of raising fresh income after its main source - the sorghum beer - took a battering from poor marketing, distribution and competition from other brands.

In a report contained within a Bulawayo City Council confidential report, BMCU board chairperson Mr Moffat Ndlovu, however, noted improvements in the beer line.

"Sectorial, brewery recorded a profit of $8 213 for the quarter, which was 102,51 percent above budget and 101,49 percent above 2015, fourth quarter results. However, included in the profits is a reversal of $137 419 in payroll provision.

"Retail recorded a loss of $82 596, against a budgeted profit of  $47 841. In 2015 retail made a profit of $122 558 over the same period. The franchise business made a loss of  $381 310 against a loss of $20 524 made in 2015," he said.

The report also read that the organisation's current liabilities exceeded current assets.

"The first quarter of 2017 will be challenging for Ingwebu. In order to survive, the business will need to continue with cost reduction initiatives that will address both variable and fixed costs.

"Some of these initiatives include; increased focus on sales effort, 20 percent salary cut for senior managers and managerial employees, reduction of wage bills through short working hours and retrenchment, prioritised repairs and maintenance, reduced hired vehicle costs and improved product cost," said Mr Ndlovu.

He noted that out of a total of 48 beer gardens the brewery franchised out they had since taken legal action against 20 of these after they failed to pay their franchising fee, with the debt ballooning to $120 499.

Some of the most notable franchisees that have been taken to court include the National University of Science and Technology Technopak (Masilela Beer Garden) which, as at 31 December 2016 owed $10 168 and the Bulawayo City Council's former acting engineering director, Mr Job Jika Ndebele (Mondela and Phetsheya beer gardens) who owe  $4 903 and $41 866 respectively.

He said from a human resources perspective there was a need to explore a number of avenues that would ensure that the business stays viable.

Mr Ndlovu revealed that due to the challenges being faced by the organisation they were now four months behind in paying salaries, which thus meant a highly demotivated staff.

"Organisational performance that is currently below par has continued to impact on the welfare of employees, leading to unprecedently low employee morale. Because of the precarious situation that the organisation finds itself going through, salary delays are continuing. We are now four months behind in salary arrears.

"From a human resources perspective some measures being put in place include; wage and salary cuts. These are being discussed in works council. The need for retrenchment as one of the measures to be undertaken by the organisation to survive cannot be downplayed. A budget has been set aside for this programme to take place. The workforce has already been sensitised about the need to go that route."

Due to the problems being faced at the brewery company - the Bulawayo City Council a couple of months ago had to engage auditors to investigate the reasons behind the impending downfall of the firm. The auditors; PNA Chartered Accountants had presented a damning report which recommended the total overhaul of the company inclusive of privatising it to protect the local authority.

The report revealed that some of the challenges faced by the company were poor financial receipts and payment mechanisms, poor hygiene and packaging, unavailability of the product, deteriorated taste, quality and consistency, lack of diversity, low shelf life and high prices due to inefficient production processes. As a result of the deteriorating state of the brewery it has been revealed that if the council ever considers selling the company, it would cost $5,6 million.

Five years ago the BMCU-run brewery was dogged by a number of problems with 16 of the council beer halls closed for allegedly incurring losses, while cattle at its Aiselby Farm were disappearing in unclear circumstances. Irked by the closure of the beer halls the council reacted by replacing the entire board.

- sundaynews

Tags: Ingwebu, aMahwu, BCC,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Cleansing ceremony for Gweru- Kwekwe highway black spot

by Staff reporter | 21 June 2018 | 78 Views

.Man hangs self in neighbour's yard

by Staff reporter | 21 June 2018 | 97 Views

Peter Ndlovu's story told in World Cup advert

by Staff reporter | 21 June 2018 | 112 Views

Banks set to cut transaction costs

by Staff reporter | 21 June 2018 | 95 Views

Mnangagwa descends on Matebeleland South

by Staff reporter | 21 June 2018 | 61 Views

Chamisa, Welshman Ncube clash?

by Staff reporter | 21 June 2018 | 111 Views

Bosso coaches gets Barcelona attachment

by Staff reporter | 21 June 2018 | 56 Views

'Mnangagwa our biblical Joshua'

by Staff reporter | 21 June 2018 | 55 Views

Econet unveils Ecocash business wallet

by Staff reporter | 21 June 2018 | 61 Views

Candidate promises bacon, egg and milk

by Staff reporter | 21 June 2018 | 41 Views

Why do so many Zimbabweans want to be President?

by Christopher Farai Charamba | 21 June 2018 | 51 Views

Dinha withdraws candidature

by Staff reporter | 21 June 2018 | 71 Views

Car dealer swindles over 50 people of cash

by Staff reporter | 21 June 2018 | 49 Views

Opposition overwhelmed by Mnangagwa's new dispensation

by Nobleman Runyanga | 21 June 2018 | 70 Views

10 Chinese medical specialists arrive

by Staff reporter | 21 June 2018 | 51 Views

Bosso ECD win #VisitZimbabwe curtain raiser

by Staff reporter | 21 June 2018 | 49 Views

ZTA ropes in Mai Chisamba as tourism ambassador

by Staff reporter | 21 June 2018 | 48 Views

MDC Alliance tells independent candidates to withdraw

by Staff reporter | 21 June 2018 | 51 Views

11-year-old gets HIV after rape

by Staff reporter | 21 June 2018 | 45 Views

Farai Jere takes over as PSL chairman

by Staff reporter | 21 June 2018 | 41 Views

3rd pupil suicide this term as Form One girl hangs

by Staff reporter | 21 June 2018 | 43 Views

Prophet Magaya fails to shake off rape trial

by Staff reporter | 21 June 2018 | 70 Views

Econet payroll moved to Ecocash

by Staff reporter | 21 June 2018 | 25 Views

Truck drivers, soldiers clash at Beitbridge border post

by Staff reporter | 21 June 2018 | 32 Views

Iyasa premiers kids play in Austria

by Staff reporter | 21 June 2018 | 38 Views

Britain increasingly willing to cosy up to nasty regimes

by Economist | 21 June 2018 | 27 Views

Politics of entitlement: A threat to electoral democracy

by Terrence Muvoti | 21 June 2018 | 48 Views

Zesa employees injured in freak accident

by Staff reporter | 21 June 2018 | 29 Views

Women urged to embrace politics

by Staff reporter | 21 June 2018 | 18 Views

TelOne offering enters the big data services

by Staff reporter | 21 June 2018 | 48 Views

Mnangagwa, Chamisa fret over 'rebels'

by Staff reporter | 21 June 2018 | 50 Views

Mutsvangwa tells Zimra to 'shape up'

by Staff reporter | 21 June 2018 | 24 Views

Chamisa must step down, says MDC

by Staff reporter | 21 June 2018 | 96 Views

Legends match flops

by Staff reporter | 21 June 2018 | 33 Views

Charumbira refuses to comply with a recent High Court order

by Staff reporter | 21 June 2018 | 30 Views

Social media game changer of 2018 polls

by Staff reporter | 21 June 2018 | 69 Views