Dairibord relocating equipment from its Bulawayo factory to other cities

Published: 10 June 2013

ONE of the country's biggest manufacturer and marketer of food and beverage products Dairibord Holdings Limited is relocating equipment from its Bulawayo factory to other cities citing viability challenges, a situation which will further accelerating de-industrialisation in the city.

The company's corporate communications manager, Ms Imelda Shoko said the general economic outlook and industry specific issues have not spared Dairibord and its subsidiaries including Dairibord Zimbabwe (Private) Limited, which operates six factories countrywide.

She said in light of those pressures that threatened viability of business and in order to ensure business continuity and sustainable value creation for shareholders, Dairibord Holdings had decided to pro-actively address the situation to ensure sustainable value creation for shareholders by right sizing the businesses in line with volume of activity.

"It is correct that we are moving some of our equipment to other factories on a temporary basis as one of the measures to ensure business viability. All other non-manufacturing operations will remain housed at our Bulawayo factory. As part of that exercise our manufacturing facilities are being reviewed so as to optimise on economies of scale in location as well as use of plant, use of raw milk as well as use of utilities. Going forward, and as a temporary measure, production of some products will be done centrally. Therefore some products that used to be manufactured at various Dairibord factories including Bulawayo will now be produced at a central location so as to benefit on economies of scale.

"The decision to centralise production on some product lines is a temporary measure aimed at ensuring viability in the short-term. Dairibord, working on its own and also in partnership with other stakeholders is deploying strategies meant to ensure that the production of raw milk in both the Matabeleland region as well as the nation in general is boosted so as to grow raw milk supplies to levels that will ensure that viable production is made possible. We are currently dealing with issues to do with boosting our raw milk supply through our Milk Supply Development Unit,” she said.

Dairibord has factories in Harare, Chitungwiza, Bulawayo, Gweru, Kadoma, Mutare and Chipinge as well as operations in Malawi which are located in Blantyre.

In an effort to boost its raw milk supply, the company is considering importing in-calf heifers from South Africa.

Late last year Dairibord imported 250 heifers and these were distributed to selected smallholder to medium-scale milk producers countrywide.

"The Dairibord (Bulawayo) factory remains strategic in terms of making the product available for both the Bulawayo and Matabeleland market as well as exports to neighbouring countries like Botswana and will remain on stand-by to manufacture the product subject to availability of enough raw milk. It is also important to note that Dairibord is not completely dis-engaging from Bulawayo as all other aspects of the business other than manufacturing will continue as usual. Sales and distribution will remain and the Bulawayo and Matabeleland markets are assured of continued service from Dairibord in terms of ensuring product availability at the right prices to valued trade customers and consumers.

"This is a demonstration of confidence in the Bulawayo and Matabeleland markets. In fact, Dairibord is on the hunt for more business partners in the form of distributors, stockists and independent vendors so as to ensure that its products are widely available. The move to centralise operations at selected factories may result in excess staff and in such circumstances affected staff will be re-deployed or transferred to other factories. Where appropriate, separation schemes will be implemented," Ms Shoko said.

She said there was need for Government and financial institutions to play a leading role in resuscitating the country's dairy industry.

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