The Sunday News
Dumisani Nsingo, Senior Business Reporter
ONE of Bulawayo’s biggest indigenous food manufacturing and pre-packaging firms, LG Foods says its laundry soap has managed to grab a substantial niche market locally.
LG operations manager Ms Esther Maluleke said the company was satisfied with the performance of its laundry soap, ZimBar which it introduced into the market a year ago.
“We are very satisfied with the performance of our laundry soap on the local market because since its introduction it has grabbed a substantial chunk of the market niche. The development is quite exciting to us given that we gave ourselves time to come up with the appropriate formula and to date we are competing for the market with other traditional brands,” she said.
Ms Maluleke said the laundry soap has managed to keep prospects of the company’s business afloat in the face of sales and profits from its other products plummeting.
LG Foods are also manufacturers of concentrated syrups, peanut butter, maputi as well as pre-packers of fine salt, matemba, sugar beans and soya chunks mostly marketed in Matabeleland region and some parts of Midlands.
“The prevailing economic challenges have had a negative impact on our business as most of our products aren’t performing well on the market. However, the performance of our green bar soap has managed to keep us afloat and we are grateful to the support we get from a number of wholesalers with specially recognition going to Food for Less, Bhagtji in Gwanda and Plumtree Wholesale,” said Ms Maluleke.
The company has capacity to produce about 100 tonnes of laundry soap a month.
“We have the capacity to produce 90 to 100 tonnes of soap per month depending on the availability of the requisite raw materials some of which we import from neighbouring South Africa,” said Ms Maluleke.
LG Foods imports beef tallow and crude oil from South Africa, which are integral in soap production. Beef tallow is oil for soaping and makes a hard bar with a rich lather. In fact, most soap bought commercially is made from tallow.
“We are always facing difficulties in being issued with import permits for the importation of beef tallow and crude oil and therefore urge the Government to get rid of this red tape. We, however, don’t have any problems in accessing the other chemicals needed for soap production as we source them on the local market,” said Ms Maluleke.
However, Oil Expressers Association of Zimbabwe chairperson Mr Busisa Moyo said the Ministry of Industry and Commerce was issuing import permits for raw materials apart from those of finished soap products.
“The Ministry of Industry is issuing adequate permits for raw materials. Pure Oil Industries, United Refineries Limited and Willowton are fully stocked with over 500 metric tonnes of laundry soap and bath soaps that are locally manufactured. Indeed permits are not being granted for finished laundry bars in particular, which some traders were seeking from the Ministry of Industry. We have disagreed with traders from importing finished products when there are local products. So we have a consistent message on certain commodities where there is adequate local manufacturing capacity,” said Mr Moyo.
Ms Maluleke said the Government should seek ways of curbing a number of smuggling syndicates, which have given rise to the influx of cheap foreign soap on the black market.
“We are urging the Government to come up with ways of curbing smuggling of goods especially soaps mostly from South Africa and Botswana into the country. These smuggled products, which are being sold by vendors, are causing unfair competition to local manufacturers and people have to realise that by buying foreign goods is creating more employment in those particular countries and increasing unemployment locally,” she said.
Mr Moyo also noted that the influx of cheap smuggled soap products was causing unfair competition on local manufacturers while impacting negatively on the country’s economy.
“We note with concern that vendors have started selling the soap bars for the US dollar cash at very low prices outside traditional chains where the cash then gets converted at an RTGS (Real-Time Gross Settlement Systems) or EcoCash rate of 1,7 and the actual US dollars find their way out of the country or remains circulating in the parallel market. Formal players have been requested not to engage in differential pricing since 2016. This has the effect of keeping USD$ out of the formal system and yet formal players were banking all their cash sales into the formal banking system,” he said.
LG Foods is one of the few Small to Medium Enterprises that has managed to withstand the test of times. The company was started by its proprietor, Mr Larrence Gwati as a backyard enterprise in the high density suburb of Cowdray Park in 2005. In 2007 Mr Gwati was to lease a factory shell at Kelvin West Industrial sites and that heralded the growth of his business enterprise.
The company remains one of the few indigenous companies that managed to weather the storm at the height of the country’s economic downturn as hyperinflation took its toll.
@DNsingo
