Africa Moyo Senior Business Reporter
GOVERNMENT’S drive to reindustrialise Bulawayo is gathering pace, with LG Foods Industries planning to ramp up production to 100 percent by Mach next year, from the current 40 percent capacity utilisation. LG Foods, which is into laundry soap and concentrates making, wants Government to resolve the fuel challenges being experienced in the country so that it broadens its market in the country.
The company’s managing director Larrence Gwati told The Herald Business yesterday that business has been riding high since Government liberalised the importation of raw materials principally beef tallow, used in soap making.
“At the moment I can say business is doing well. We initially had challenges especially this year being an election year; things started taking a nose dive but I kept on pushing,” said Mr Gwati.
“Soon after elections, there was a serious shortage of basic commodities and the Government opened the imports of our main raw materials, which is beef tallow for soap making.
“We grabbed the opportunity and started importing. Right now I think in terms of production, we are at 40 percent but our production is rising very steadily such that we hope to reach 100 percent by March next year.”
LG Foods also packs salt and maputi.
Mr Gwati said their products — Zimbar soap, salt and concentrated syrups — are currently being supplied in Bulawayo, Lupane, Gwanda, Binga, Gweru, Hwange, Shurugwi and Zvishavane, among other towns.
Despite being allowed to import key raw materials, Mr Gwati said foreign currency shortages remain a challenge.
“Forex is a challenge since we are importing but we have the best price on all of our products. We also hope the fuel situation normalises so that we can afford to deliver to our customers,” said Mr Gwati.
LG Foods was started in 2006 as a backyard factory in Bulawayo’s Cowdray Park suburb, packing salt, sugar beans, matemba and other products.
In 2008, the company moved to a bigger factory in Kelvin West Industrial area and started doing maputi and concentrated syrups.
However, like most businesses, LG Foods was adversely affected by the economic challenges dramatised by stratospheric inflation which hit the country in 2008.
The demonetisation of the Zimbabwe dollar after the adoption of multiple currencies in 2009 to keep inflation in check, compounded the situation as companies had to build their financial base from zero.
Mr Gwati was forced into selling his Emganwini, Bulawayo, house to generate some funds to reinvest in the business.
“I pushed even though it was tough because I had accumulated a lot of debts until 2016 when I bought the soap making machine.
“We encountered massive problems because we had no idea of making soap and during the trial period, I lost more than US$15 000 of spoiled soap.
“I soldiered on until 2018 January when our product came right,” said Mr Gwati.