Business / Companies
Ingwebu requires $100m war chest
14 Feb 2018 at 05:56hrs | Views
Ingwebu Breweries which was unbundled last year needs more than $100 million to be fully turned around, Bulawayo City Council (BCC) mayor, Martin Moyo, has revealed.
Ingwebu has been run under Bulawayo Municipal Commercial Undertaking, a wholly-owned BCC business entity since 1996.
But the entity fell on hard times, making persistent losses, with the latest being $2 million in the nine months to September 2016, prompting the local authority to privatise it.
Moyo told NewsDay on the sidelines of the National Tourism Strategic Sector Consultative Workshop held in Bulawayo on Monday that a board of directors to overlook Ingwebu has been set.
"Ingwebu is now a registered private company and it has a new board of directors. Of course, we gave them the vehicle which is dead, so they are still working on the vehicle to put it on the road. So for now, I think we need to be patient and give them more time to turn around the company," Moyo said.
Asked how much does Ingwebu needs to match its competitors, Moyo said anything less than $100 million would not help revive the company.
"It's difficult for me to say how much does Ingwebu need, but I can compare it with a competitor, Delta. Delta is well resourced and they have got good equipment, new boilers and their beer has a longer shelf life and so on," he said.
"These are things needed to be achieved by Ingwebu. Funds that are needed, of course, as shareholders (council) of Ingwebu we don't have the money to properly capitalise it. We think there is more that needed to be done."
"Maybe, we could be talking about millions of dollars. Well, I don't think anything less than, let's say $100 million would really do them any good. They will need significant money, so that they can stand out and begin to compete on the market," he said.
Apart from privatising Ingwebu, the BCC has already leased some of its bars around the city.
The brewery has operated under difficult conditions and stiff competition, in an industry dominated by Delta Corporation's Chibuku brands.
Ingwebu has been run under Bulawayo Municipal Commercial Undertaking, a wholly-owned BCC business entity since 1996.
But the entity fell on hard times, making persistent losses, with the latest being $2 million in the nine months to September 2016, prompting the local authority to privatise it.
Moyo told NewsDay on the sidelines of the National Tourism Strategic Sector Consultative Workshop held in Bulawayo on Monday that a board of directors to overlook Ingwebu has been set.
"Ingwebu is now a registered private company and it has a new board of directors. Of course, we gave them the vehicle which is dead, so they are still working on the vehicle to put it on the road. So for now, I think we need to be patient and give them more time to turn around the company," Moyo said.
"It's difficult for me to say how much does Ingwebu need, but I can compare it with a competitor, Delta. Delta is well resourced and they have got good equipment, new boilers and their beer has a longer shelf life and so on," he said.
"These are things needed to be achieved by Ingwebu. Funds that are needed, of course, as shareholders (council) of Ingwebu we don't have the money to properly capitalise it. We think there is more that needed to be done."
"Maybe, we could be talking about millions of dollars. Well, I don't think anything less than, let's say $100 million would really do them any good. They will need significant money, so that they can stand out and begin to compete on the market," he said.
Apart from privatising Ingwebu, the BCC has already leased some of its bars around the city.
The brewery has operated under difficult conditions and stiff competition, in an industry dominated by Delta Corporation's Chibuku brands.
Source - newsday
