via Mugabe’s dairy hits hard times – The Zimbabwe Independent January 29, 2016
PRESIDENT Robert Mugabe’s debt-ridden dairy business, Alpha Omega Dairy (Pvt) Ltd, is facing operational problems as it emerged that the company is struggling to supply its products to various retail outlets in the country despite a push for local procurement of goods, investigations by the Zimbabwe Independent can reveal.
Alpha Omega, a multi-million-dollar business located in Mazowe, is a subsidiary of the First Family’s business empire, Gushungo Holdings. The company has been touted as a model of success of the controversial land reform programme embarked on at the turn of the millennium.
It has since emerged that Alpha Omega, which is seeking fresh capital to stay afloat, is facing cash flow constraints, which have made it difficult to produce brands such as its Appertina yoghurt flavours, Alpha ice cream and Mnandi sour milk.
The company, according to well-informed sources, has since hired a consultancy firm to steer it out of the crisis.
A management shake-up, which claimed the scalps of executives such as general managers, quality assurance and sales and marketing managers, came after the company hired audit firm Ernst & Young to carry out an audit.
The Independent observed that most supermarkets in Harare last received Alpha Omega products at the beginning of December last year, with some going for three months without a delivery.
In a survey carried out by this paper over the past two weeks at different supermarkets, including Athienitis Fife Avenue, OK, Bon Marche, TM Pick n Pay, Spar, Food World and Choppies branches in Harare, it emerged that there were no Alpha Omega products on the shelves and refrigerators in most of the shops. The few that have the products only had the Mnandi sour milk.
However, other dairy companies such as Dendairy, Dairibord and Kefalos deliver their products weekly at a time government has been pushing the Buy Zimbabwe campaign to lower the country’s unsustainable import bill. Zimbabwe, which has become a net importer due to accelerated de-industrialisation, has a huge trade deficit of US$3 billion.
When this paper called Alpha Omega offices in Mazowe for an official comment, an official who identified herself as Mrs Sibe from the human resources department denied the company was failing to supply its products.
“As far as I am concerned, we are delivering our products to supermarkets. However, I will get our sales and marketing manager to call you back,” she said.
The sales and marketing manager had not called back at the time of publishing.
An Alpha Omega sales representative who spoke to the Independent confirmed that the dairy business is facing serious operational problems in delivering most of its products.
“Yes, we have been facing challenges; we do not have yoghurts at the moment, but we will be supplying soon. Vakuru vakatiudza kuti zvirikunaka manje manje (The bosses have told us that everything will be back to normal soon),” said the sales representative in a telephone conversation.
Former general manager Stanley Nhari, said he could not comment on the issue as he was undergoing treatment in South Africa.
Nhari has in the past said local banks, in particular the Industrial Development Bank of Zimbabwe (IDBZ) and CBZ Bank, have been sustaining Alpha Omega operations.
During the survey, the paper spoke to different shop assistants at the supermarkets who revealed the company was not consistent in the delivery of its products.
One shop assistant at TM Pick n Pay along Sam Nujoma Street in the capital yesterday said: “I understand they stopped production of yoghurts and have reduced production of ice cream which is why we only have their sour milk in stock.”
Another shop assistant at OK Albion in Harare said: “The company does not deliver on time and sometimes they can go for up to two weeks without meeting the demand,” she said.
Montagu Spar in Harare’s Avenues area, like many other supermarkets, only had Alpha Omega’s sour milk in stock.
“We are not sure what is really going on at the company. Their deliveries have been reduced, they are probably failing to supply all supermarkets with their products,” said a shop assistant working for the supermarket.
“What happens is that each company has their own merchandiser at the supermarket who then places orders for the branch; it’s most likely that the Alpha Omega merchandiser has placed orders, but they are failing to deliver.”
During investigations, Alpha Omega vendors have maintained a low presence on the streets due to a low range of products. Only vendors from other dairies were operating as usual.
One Alpha Omega vendor close to the busy Copacabana terminus said business was low as he was only selling Mnandi sour milk.
“Vanhu vanodawo maice cream nemayorghut kana kuchipisa kudai asi isu tine mukaka chete (People want ice cream and yoghurt when it is hot, but we only have sour milk for),” he said.
The vendor said the company had promised to increase supplies soon without giving them a specific timeline.
Staff at Alpha Omega’s Harare office along Simon Mazorodze, when spoken to about the business challenges, they pinned their hopes of a turnaround on new management.
Last year, the Independent reported that the business was reeling under an unsustainable US$20 million debt exacerbated by perennial losses incurred by the dairy business.
Mugabe has in the past blasted the former management for running down the company through mismanagement and misappropriation of funds
Addressing guests at his niece Petronella Nhetekwa’s 80th birthday celebrations in Mhondoro, in October last year, Mugabe expressed his frustration over the state of affairs at his company before suggesting corruption was rife because of society’s failure to mould upright citizens.
“I decided to start a dairy business,” he said. “We hadn’t moved into cheese production, but we had started producing ice cream. See what was happening: nobody can tell us where the money is.”
Mugabe added: “Some (of the employees) did accounts, but prefer not to follow proper accounting procedures to hide their thievery. We have hired auditors from Ernst & Young and what they are unearthing is shocking.”
The Alpha Omega Dairy plant has a capacity to process 70 000 litres of raw milk per day.
Before the shake-up, management had projected to double raw milk output to 40 000 litres per day by end of 2015 from a peak of 23 000 litres per day.