(4 minutes read)
· South African bakery business, while preparing to re-open tocontinue with the businesses, is getting bogged down by possible lackof demand and more importantly high incidence of infections among thestaff
· Covid-19 appears to have affected smaller bakeries ratherthan the bigger ones, which apparently had weathered the difficulttrajectory.
South African bakery business, while preparing to re-open to continue with the businesses, is getting bogged down by possible lack of demand and more importantly high incidence of infections among the staff. Covid-19 appears to have affected smaller bakeries rather than the bigger ones, which apparently had weathered the difficult trajectory.
For instance, the largest bakery-Tiger Brands- which had to close down a large bakery due to staff getting infected with a virus, had reported a profit of R359.6 million for the six months ended in March 2020 compared to R1.4 billion in the corresponding period lastyear. Tiger Brands, considered to be the largest bakery in Africa, had to take a haircut in profit by more than 60% as compared to the same period last year. While the company is exuding optimism that it would be back to its pre-Covid -19 days, it feels that it would be possible at the cost of jobs since margin from business has come under great stress-declining from 7% to nearly half to 3.2%. The company invested almost R500 million for replacement, efficiency optimization and brand development. .
Other large food manufacturing companies are also feeling the brunt of slowdown compounded by the Covid-19 impact. Another bakery-Premier Foods – closed its Cape Town Blue Ribbon bakery closed down its facility after 69 of the 70 staff tested positive. At the end of April and early May, a number of employees were tested positive for Covid-19 at the Shakaskraal bakery in KwaZulu Natal. The company also closed down a rice packing plant for deep cleaning but reopened 48 hours later. One of the other bakeries in Cape Town owned by the same group has seen a number of positive cases. Analysts say that the situation prevailing in other bakeries also is somewhat similar.
