ZIMBABWE – National Foods, Zimbabwe’s leading flour and food producer has announced that it plans to shut down its flour mills blamed on impeding foreign currency shortages in the country, according to ANA report.
The Harare based food company had written to its customers indicating the intention to close down its flour processing factories in Harare and Bulawayo.
The company, jointly owned by Tiger Brands and Innscor Africa is reported to have been unable to pay its suppliers in a country that has long-battled forex, fuel and medical supply shortages.
However, it said that it would continue milling out wheat in process and supply the limited stock it already had in stores.
“As you are well aware the nation has been facing foreign currency shortages for some time.
As a consequence, National Foods has faced difficulties in settling its foreign wheat suppliers,” said the firm in the letter.
“Our suppliers regret having to take this position but have themselves reached the point where they cannot fund their businesses.”
Manufacturers in Zimbabwe have been unable to access the required hard currency to import raw materials in their processing, given that the country heavily relies on multiple imports.
Zimbabwe misfortune tales date back to 2009 it resolved to using different currencies, mostly the US dollar and since the change in governance, there has been the struggle to revive the country’s economic muscle.
In dire need of foreign currency
National Foods, whose portfolio comprises of fast foods, maize and flour milling, snacks manufacturing, poultry and edible oils had in the past approached the Reserve Bank of Zimbabwe to manage funding for its wheat import requirements.
The company said it needed foreign currency urgently to settle outstanding wheat supplies so that production can continue in the targeted food processing plants.
According to chief executive Michael Lashbrook, the company is in talks with the Reserve Bank of Zimbabwe seeking an unspecified amount of money for outstanding payments for grain supplies.
He said that once the payment is made, normal supplies will resume.
Shutting down operations by the miller will lead to shortages in Zimbabwe which has in the past been facing inadequate bread supplies.
Despite of the reports, the Industry Ministry maintains that the country has enough wheat to last four months.
“We are prepared to assist those companies that are facing difficulties in sourcing foreign currency to purchase wheat and other needed goods,” said Industry Minister Mangaliso Ndlovu.
Reacting to the news, Grain Millers Association of Zimbabwe (GMAZ) said that the country is set to receive adequate wheat supplies within the next few days.
Following shortages in bread supplies, GMAZ move to suspend the supply of bread and self-raising flour to biscuit producers to reserve it for bread.
In the middle of low wheat stocks and inadequate forex, the Reserve Bank this year released US$20 million for importation of wheat from Canada and Germany.
According to statistics, Zimbabwe requires about 460,000 tonnes of wheat annually The national wheat requirement is 38,000 tonnes a month with a daily consumption of at least 1.5 million loaves.
Source: Food Business Africa