Bulawayo mayor Martin Moyo says the council’s wholly owned Ingwebu Breweries is back in the black after several years, but requires $4 million to refurbish the brewery plant and increase its footprint.
In his New Year message, Moyo said the Bulawayo municipal undertaking moved from loss to profit during the course of the year.
“This was evident from the profit margins achieved as (Ingwebu) moved from a negative 7.7 percent to a positive 9.3 percent. Ingwebu requires $4 million to refurbish the brewery plant and increase distribution vehicles,” said Moyo, without giving absolute figures for the brewer’s financial performance.
On November 14, Ingwebu chairman Moffat Ndlovu said that the firm was struggling under pressure from falling demand for its products and the high cost of operating its antiquated machinery.
He said sales had been going down for some time and they were not realising any profits.
“The challenge we are facing is that we are using the old plant and to change it we need a lot of money. We are putting some strategies to make sure that we are keeping on track. We are also thinking of introducing other programmes,” Ndlovu said then.
Early last year, the company announced the plans to set up a plant to produce non-alcoholic sorghum beverages in a bid to diversify its income from its traditional beer offering, but failed to raise the $500 000 needed for the project.
In his annual message to the city, Moyo bemoaned lack of investment in Bulawayo as well as the prevailing liquidity crunch, saying it has negatively impacted on council’s financial performance.
He said the first quarter of last year saw cash receipts averaging $5 million per month as opposed to $6.5 million for the same period in the prior year. The council requires on average $7.2 million per month to provide basic services.
The council is also one month behind on payment of salaries, Moyo added.
“Due to diminished cash-inflows, creditors’ balances have also risen. This has seen council entering into payment plans with its creditors,” he said.- The Source