HARARE – Zimbabwe's legendary bread making company Lobels Holdings which is now owned by army Generals has closed down production operations at its Harare bakery due to what company directors said unavailability of lines of credit to boost operations at the struggling bread-making entity.
Following revelations that the bread-making firm is embroiled in a huge debt which led to the attachment of property by creditors, the entity has finally closed shop for the next two months in a bid to finalise negotiations with a potential investor.
In an interview in the State media in the capital, Lobels Holdings Director, Retired Brigadier General David Chiweza admitted that the firm has succumbed to challenges relating to the misappropriation of funds by some executives who have already left the organisation.
Retired Brigadier Chiweza said the firm is seeking minimum capital injection of US$3.5 million, adding that a strategic partner for the bread-making firm has been identified and the deal is will be finalised in the next few days.
With indications that negotiations between Lobels and its equity partners is at an advanced stage, the coming back of the firm into operation will boost bread availability and create employment.
The firm has been constrained over the years owing to prevailing macro-economic environment and poor management.
Meanwhile, the National Bakers Association of Zimbabwe has come under fire owing to continued shortage of bread on the market leaving consumers speculating on what gripped the bakery industry.
Bread shortages have hit Harare over the weekend with the National Bakers Association of Zimbabwe failing to give a concrete response on the constraints that are bedevilling the baking industry.
National Bakers Association president, Mr Cydwell Chitehwe promised to address the media on Wednesday while the vice president, Mr Owen Murumbi opted to give details on the performance of his organisation for the past 10 days than responding to questions relating to bread shortages.
Information obtained indicate that the closure of Lobels and Superbake last week impacted negatively on meeting demand on the market, while some sources indicate that the move is deliberate to ensure an increase in bread price.
Retailers Association of Zimbabwe executive member, Mr Danford Mutashu said the bakers association is yet to come out clear on the causes of bread shortages, adding the move is driven by the need to increase bread prices.
Bread shortages have hit the capital with no signs of recovery in the near future, but observers noted that the need to increase bread prices is uncalled for as prices have become stable in the region and beyond with a loaf of bread fetching less that 50 cents in the region.