Published by the government of Zimbabwe
16 April 2008
Harare — Lobels Biscuits, bogged down by operational constraints emanating from low flour supplies, has applied to the Reserve Bank of Zimbabwe for a special dispensation to keep 90 percent of its export proceeds for seven months.
Presently, companies are required to surrender 40 percent of their foreign currency earnings while retaining the balance to meet their needs. In a meeting with a Reserve Bank of Zimbabwe team last week, Lobels Biscuits managing director Mr Clinton Lecluse implored the central bank to "rescue" the company, currently operating at 40 percent capacity. Lobels Biscuits, which exports biscuits and sweets, mainly into the region, has not been able to supply to its new markets that include Angola, Mozambique, Malawi and the United States due to production constraints.
Its exports to Zambia have also not resumed. Mr Lecluse said the foreign currency reprieve would enable the Bulawayo firm to import enough flour to last until the next wheat harvest. Lobels needs at least 400 tonnes of biscuit flour per month. "Currently traditional millers are not supplying us with flour and we are having to depend on independent suppliers, who are charging high prices," he said. When the RBZ team visited the firm last Thursday, ovens were switched off and most of the machinery was not in use because there was no flour.
"Today we just asked our workers to come and clean the walls," said Mr Lecluse. RBZ division chief strategic planning, foreign investment promotion, academy and special projects Dr Millicent Mombeshora said the central bank would look into the application but challenged the firm to pursue strategies such as contracting wheat farmers to ensure adequate supplies in the medium to long term.
Zimbabwe has been experiencing a critical shortage of wheat over the last few years and has had to import the commodity. Preparations for the winter wheat crop are now in full swing. Last season output levels were adversely affected by shortage of electricity. In some cases, farmers had to destroy hundreds of hectares because there was no power to irrigate their crop. Such challenges are expected to be minimal this year to ensure the agricultural subsector recovers.
Internationally wheat supplies have not been able to meet demand with regular price movements now anticipated.
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