BY TATIRA ZWINOIRA
FAST food company, Simbisa Brands Limited (SBL) says importation of more efficient machinery has seen the firm reduce its diesel usage by 15% to about 110 000 litres monthly.
In August, Simbisa reported that it was spending $780 000 on diesel monthly to run generators at its Chicken Inn, Pizza Inn, Baker’s Inn, Creamy Inn, Fish Inn, Rocomamas, Steers, Nando’s and Galito’s outlets amid crippling nationwide power cuts.
“Diesel is still a big cost which was not there in the prior year. But, I am glad to say that there have been some improvements in that we have imported more efficient generators from South Africa and China which has helped in the reduction,” SBL managing director Warren Meares told NewsDay in a phone interview.
“We have even tried to import more efficient gas equipment to reduce the reliance on diesel. So, I would not say its huge, but we have managed to reduce our need for diesel by 15% (from our previous) usage. You are talking about 15% of about 120 000 or 130 000 litres, so we are still using around 110 000 litres just on generators alone.”
He said diesel costs forced them to reduce the planned 33 new outlets to just under 20 this year. During power cuts, Simbisa has sometimes employed food trucks that run on generators or used gas to continue serving customers during the daily power cuts.
As a result, SBL reduced working hours to only peak times to cut down on diesel.
According to the Zimbabwe National Chamber of Commerce 2019 Survey Report on Energy Challenges in Zimbabwe earlier this month, about 88% of surveyed firms indicated that the use of generators instead of electricity had seen profits plummeting.
The firms complained that the use of generators for powering business activities was not the best option for Zimbabwe given the rising fuel prices. Diesel currently costs $17.90 per litre. The survey stated that 65% of the firms surveyed reported having electricity for only up to six hours, while 20% reported having between seven and 12 hours per day. These are among the reasons why Simbisa registered as a “tourist facility” under the Zimbabwe Tourism Authority to allow it to start offering United States dollar pricing to reduce pressure on turnover.
“We are getting a bit of forex which is about 15% and 20% of our turnover, but it is still 85% RTGS and swipe. You are talking about $100 million in bond and just under US$1 million per month so it’s tough trying to balance which is why we still need to go to the interbank,” Meares said.
“This is why we have slowed down; we are not opening as many outlets like we used too. We have had to slow down on our expansion.” Currently, Zimbabwe’s main power generation source, the Kariba Dam, has very low water levels due to recurrent droughts which have affected the nation’s power generation capacity. Also, Energy minister Fortune Chasi warned that recent power generation struggles in South Africa could also affect imports from that country that averages 400 megawatts.