By Kenneth Matimaire
Mutare, March 07, 2016 – SOFT drinks manufacturer, Mutare Bottling Company (MBC) has been forced to streamline operations owing to a harsh operating environment the company has described as “extremely difficult at present”.
The company sales volumes have been under pressure forcing the beverages company to implement cost cutting measures in order to remain competitive and able to survive the harsh operating environment.
As a result, MBC has over the past year been reviewing its labour force, distribution and marketing departments as part of its endeavours to remain viable.
The bottling company has been feeling the heat owing to a cross-section of challenges ranging from the influx of cheap alternative beverage imports and high unemployment levels in the province reducing the purchasing power.
The situation has been exacerbated by the current drought in a province with industries that are highly dependent agro-based raw material, MBC included.
“The operating environment is extremely difficult at present. Sales volumes are under pressure due to the high levels of unemployment in Manicaland and limited disposable income amongst consumers who are employed.
“The situation is made worse by the looming drought in a province that is very dependent on agriculture and also by the increased competition from cheap substitutes and alternative beverages which have lowered prices and put pressure on manufacturer’s margins,” said MBC managing director Allen Lang.
The remarks came after a capacity analysis conducted by the firm, which raised concerns of the influx of cheap beverage imports.
The analysis indicated that they were wary of competition posed by foreign players and invested in the automated $17 million plant to keep the firm on the leading edge.
The Mutare based franchise cited Pepsi-Cola – the world’s second largest biggest carbonated beverages firm after Coca Cola – as their major competitor.
Pepsi-Cola has since entered the local market through local importers and distributors.
While MBC had projected demand for soft drinks to increase to 2,5 million by next year and 2,9 million in 2020, the emergence of competitors, unemployment and looming drought are likely expected to affect their sales.
However, Lang said they are up to the task to make sure that the company remains viable.
“This in turn has made it necessary to streamline operations in order to cut costs so that we remain competitive and are able to survive,” he said.
Meanwhile, the company is in the process of importing 300 tonnes of sugar from Malawi with 180 tonnes already received.
The development came at a time when local suppliers have been affected by both operating challenges and looming drought.