Mahewu weighs down Ingwebu profits

THE Bulawayo Municipal Commercial Undertaking, Ingwebu Breweries has blamed extremely low uptake of its non-alcoholic beverage, Mahewu in the fourth quarter of 2022 to unavailability of the imported packaging materials.

The firm said despite the demand for Mahewu it sold a mere 15 437 cases for the quarter under review against previous quarter volumes of 58 431 cases and budget of 62 255 cases.

“The packaging raw materials are currently sourced from outside the country and are pricey hence lower profit margins for the product,” reads part of the fourth quarter report.

Ingwebu also indicated that sales of sorghum beer only amounted to 11,01 million litres for the quarter under review compared to the previous period volumes of 9,69 million litres and budgeted volumes of 15,39 million litres.

“The non-alcoholic beverage did not perform as expected or match the previous year volumes.

The failure to service the market with the Mahewu product despite the high demand for the product was as a result of the unavailability of the imported packaging materials.

“The packaging raw materials are currently sourced from outside the country and are pricey hence lower profit margins for the product.

The organisation managed to sell 15 437cases for the quarter under review against previous quarter volumes of 58 431 cases and budget of 62 255 cases.

The year-to-date volumes stood at 60 569 cases against previous year volumes of 155 856 cases and budgeted volumes of 162 415 cases. Going forward the organisation will continue looking for cheaper alternative packaging materials,” reads the report.

On the sorghum beer segment, Ingwebu noted that it managed to sell 38,1 million litres for the current year against a previous year volume of 40,88 million and against a budget of 48,57 million litres.

“The failure to match the previous year volumes or meet the budget was as result of poor economic performance during the course of the year emanating largely from the dwindling disposable income,” it said.

On a positive note, it said it managed to re-introduce the Shake It product after a sustained period off the market noting that the product was highly received by the market hence giving the company a competitive advantage.

Mahewu

According to the report, Ingwebu total southern region market share for the fourth quarter closed at 24 per cent at par with the third quarter of the period under review.

Its market shares broken down per territory for the fourth quarter shows that in Matabeleland it had 37 percent, Zvishavane (12 percent), Masvingo ( four percent), Gweru (six percent) and .

Kwekwe two percent. Packaged beer volumes for the fourth quarter closed -1 percent to budget and 13 percent above the same period last year.

On financial performance, Ingwebu managed to post a profit of US$319 040 for the quarter under review against a budget of US$340 284 and previous quarter profit of US$488 850.

The year-to-date profit stood at US$942 488 against a budget of US$1 859 049 and previous year profit of US$1 249 837.

“Plans are now at an advanced stage to introduce in the market long life product in the form of PET. This will involve the purchase of the PET machine which is expected in the 2nd half of 2023.

The introduction of the PET will go a long in improving the organisation’s cashflows in the mid to long term hence it’s going concern,” it said.

Ingwebu Breweries was established in 1946 as a department of BCC and in 1996, council created a wholly-owned business entity called Bulawayo Municipal Commercial Undertaking.-chronicle.co.zw