Lobels Bread Success Story
Tue Apr 02, 2019
Lobels Bread was established in 1948 under the name Wonder Bakery (Pvt) Ltd before changing the name to Lobel Brothers (Harare) (Pvt) Ltd and later Lobels Bread (Pvt) Ltd in year 2000. The company was established by the Lobel Brothers in Bulawayo manufacturing both bread and biscuits. The brand was created over a 60 year period and has grown in leaps and bounds to become a household name in the bread and confectionary industry in Zimbabwe.
Lobels Bread (Pvt) Ltd was granted a Lease Hire Facility for $122,598.00 on 17 January 2013. The purpose of the facility was to finance the purchase of a 9 x brand new Nissan NP200 ¾ Tonne Bakkie 1.6L for use by the company’s Sales Representatives who have to travel to various places in and around Harare to sell and secure customers and orders. This facility has since been paid up without any struggle. Client was granted a second facility in November 2013 to acquire brand new delivery trucks at a total cost of $1,214,950.60. A third facility was grated in November 2014 for the procurement of a 100,000 capacity semi-automated bread making plant with a total cost of $3,300,000.00.
Previously Lobels Bread had a small fleet of old delivery vehicles which were not sufficient for its resuscitation programme. The business aimed to be ahead of other market players by ensuring that its vehicles always reach the market first. This is a crucial tactical strategy as customers will not take more deliveries when they are already sitting on stock piles of bread from the early birds. The laggards tend to suffer in this business. Lobels used to outsource its distribution fleet which used to put it at a serious disadvantage compared to competitors. Motor vehicle hire costs of USD1,519,752.00 for the 9 months to September in 2013 were on the high side as the client over relied on hired trucks as a distribution channel.
With the acquisition of 15 delivery trucks in November 2013 Lobels managed to do away with hiring delivery trucks which was an expensive and sometimes unreliable exercise. The 15 trucks played a very crucial role in bringing back the organisation to its previous market position after facing operational and viability challenges as a result of poor corporate governance and gross mismanagement during the period up to June 2011.
The ACL lease finance facility granted for the purchase of Nissan NP200 trucks for the sales personnel contributed to the increase in sales volumes. The increase is also attributed to the general increase in demand for the client’s product as new routes namely Mutare, Gutu and Chegutu were also opened.
The first two leases granted to Lobels resulted in the creation of at least 20 jobs which were occupied by males mainly. The third facility for the bread making machine has just been installed and waiting for commissioning hence it has not yet made any much impact to the organisation.