109 milling firms close, 13 000 rendered jobless

HARARE – Zimbabwe’s economic turmoil has resulted in 109 milling companies closing down in the past eight years amid fears that the Mandatory Food Fortification programme will result in more milling companies twisting in the wind.

Industry experts reason that these companies used to employ an average of 120 people each, both indirectly and directly, and this translates to about 13 000 people who have lost their jobs between 2009 and May this year.

According to statistics from the Grain Millers Association of Zimbabwe (Gmaz), 105 out of 128 black-owned grain milling companies shut down while four out of five wheat milling companies also went bellies up.

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“The economic challenges of the past 10 years have seen the country’s operating black millers dwindling from 128 in 2009 to 23 in May 2017, country operating wheat black millers have fallen from five in 2009 to one in May 2017,” said Gmaz chairman, Tafadzwa Musarara, in a speech at a command agriculture all stakeholders’ conference recently.

“Mandatory fortification cannot and must not be allowed to come and finish them off. If this mandatory fortification programme is enforced as from July 1, 2017 as being threatened, we will see many millers unable to continue production, especially our small scale black indigenous grain millers.

Musarara gave insights into the impact of the food fortification initiative on the milling industry.

In terms of the programme, manufacturers of mealie-meal, sugar, cooking oil and flour would be required to add nutrients into their production in order to mitigate the effects of poor nutrition among Zimbabweans, especially the marginalised poor.

The programme has already created a furore between government and millers, although it has been embraced by other industry players.

Musarara revealed that by imposing the fortification programme on the grain milling industry without providing the necessary financial support, government is now forcing the milling industry to incur an import bill of circa $20 million on equipment and machinery to do the fortification, and a monthly bill of $7 million of nutrients.

“These funds are not available and we pray that this obligation be waived,” he said.

Zimbabwe consumes $1,2 million tonnes of maize meal and 0,4 tonnes of wheat flour annually.

The closure of milling companies will worsen the job situation in the country.

Unemployment is currently hovering above 80 percent, with many of the jobless eking out a living in the informal sector.

It has really been a difficult period for the milling industry, where small and big players alike have been singing the blues.

Industry giants such as Blue Ribbon Industries (BRI) have scaled down their workforce from about 600 people to 200, after resuming operations in 2015 following a judicial management placement.

BRI, known for its popular Chibataura and Ngwerewere  maize meal brands, was pulled from the brink of closure after inking a take-over deal with Tanzania’s Bakhresa group, which has operations in Kenya, Rwanda, Burundi, Malawi, Mozambique and South Africa and has created over 10 000 jobs.

Another industry giant of yesterday, Victoria Foods, owned by CFI Holdings, was forced to lay off its employees after being placed under judicial management last year.

Contacted yesterday for comment, Industry minister Mike Bimha said he was not fully aware of the fortification programme, adding that his ministry would be willing to negotiate with the Health ministry to help out struggling companies.

“I don’t have the full picture of the programme; I am yet to get information on the food fortification, I just heard there is going to be that programme but I have not yet been informed. It might be something that is being done on the technical level with officers in the ministry,” Bimha said.

“But if there is something that industry needs help with, they can come to us and we can help them and even help them in negotiating with the Health ministry. We will be happy to help with that if they are any problems.”

Health minister David Parirenyatwa, in a recent letter to the millers, said he was aware of unfavourable economic conditions millers were facing.

“The government is very much sensitive to middle and small-scale industries who could be facing challenges in the current economic environment. As a ministry, we have put in place a mechanism for these middle and small industries that require further time to prepare for mandatory food fortification to seek special waivers for a certain period that is granted by the permanent secretary of Health,” Parirenyatwa said.

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