Business / Companies
Ingwebu Breweries to be privatised
13 Feb 2017 at 05:49hrs | Views
THE BULAWAYO City Council says it has started consulting stakeholders on its proposed plan to privatise Ingwebu Breweries, amid concerns that the plant's machinery had become obsolete and requires massive capital injection to bring it back to viability.
Town clerk, Christopher Dube, in a statement yesterday, said since its inception in 1946, the liquor unit had always operated as a department of the City of Bulawayo before it was turned into wholly-owned council stand-alone business entity in 1996.
He said this was to allow council to concentrate on its core activities.
Dube said during the late 1980s the economy was deregulated, opening up opportunities to other players to enter the traditional beer market, effectively reducing Ingwebu's market share.
"The downturn in the economy also affected the performance of Ingwebu Breweries. It, however, managed to continue operating under difficult economic conditions and stiff competition," he said.
"The plant is now old and requires capital injection to bring the business to a viable position. Since inception, no major injection of fresh capital was made to modernise the plant."
Dube said for council to better appreciate the extent of the funding needs and challenges facing the brewery, councillors and management toured the plant during the first quarter of 2016. He said this culminated in the floating of a tender for consultants to conduct a feasibility study of turning the entity into a private company.
"In the last quarter of 2016, City of Bulawayo signed a contract engaging a consultant, who produced a report, which is now guiding council on the best way to turn around Ingwebu Breweries' fortunes," he said.
"In the past, Ingwebu has failed to access funding from financiers, who have questioned the legal status of the brewery. The major thrust of the privatisation of the brewery is to protect the Bulawayo City Council and stop the accumulation of further debts. It is also to allow Ingwebu to access new streams of funding from independent investors."
Dube said Ingwebu Breweries and Aisleby and Goodhope farms have produced audited financial statements from inception and declared dividends in good times.
"The City of Bulawayo is proud that the board and management of Ingwebu weathered all storms to remain one of the few local authority operated breweries in the country. At this stage, the City of Bulawayo, the board and management of Ingwebu Breweries are moving into the implementation programme to turn Ingwebu into a private company. All stakeholders are assured that business operations continue as usual."
Source - newsday