OK Zimbabwe pins hope on supply chain

OK Zimbabwe chief executive officer Alex Siyavora, believes improved product supply will be key for the retail giant post the Covid-19 induced lockdown that left some of the retailer’s shelves with only a few items.

Today marks day 14 since President Mnangagwa declared a 21-day National Lockdown in an effort to prevent the spread of the Covid-19.

The Covid-19 pandemic and the subsequent lockdown disrupted the supply of products with some suppliers not being able to access source markets for raw materials.

According to a snap survey conducted by industry’s representative body Confederation of Zimbabwe Industries (CZI), manufacturers have not had it easy as supply chains were disrupted.

The survey revealed that manufacturers’ production and trading volumes declined by 36 percent on average mainly as a result of reduced workforce, temporary closure of the firms and disrupted supply chains.

Supply chains have been disrupted by the coronavirus global pandemic, as countries closed their borders and went into national lockdowns in a bid to try and contain the Covid-19 pandemic, which has resulted in more than 100 000 deaths globally.

On the local industry front, the snap survey results showed that “81 percent of the surveyed firms experienced supply chain disruptions”.

“This has affected raw materials supply, which is needed to keep industry rolling.”

Availability for products to sell is the biggest worry for Mr Siyavora who told our sister paper, Business Weekly in emailed responses that “sustainable recovery would come from improved supply of products for sale”.

He said consumers had stocked up prior to the 21-day lockdown but at the same time “shelves were left with few items”.

“Availability of product is key in our business.  We have thus stayed engaged with our suppliers for support with products for sale,” Mr Siyavora said.

He said focus at the moment would be mostly on basic products, which were also among some of the essential products which would continue to be produced and distributed during the lockdown period.

While the availability of products will help in a quick turnaround for the business post the lockdown and the overall impact of Covid-19, consumer demand will also be key.

According to Siyavora, the impact of the lockdown was that average daily sales in April dropped significantly from the average generated in March.

This he said was a result of a reduction of trading hours to six in eight provinces and to four and three hours respectively in two other provinces.

The retail giant also closed 6 CBD branches as people were expected to shelter in place during the lockdown and shop in stores within 5km radius of where they stay.

“That meant there would be few people driving to town. Activity was thus likely to be very low,” Mr Siyavora said.

As a result of reduced demand and store closures and the subsequent decline in revenue generated, Mr Siyavora said the business will struggle to meet some of its costs.

“We will struggle to cover our fixed costs in April, but then again March was a good month as consumers stocked up in readiness for the lockdown.”

Like other business, OK Zimbabwe had also seen a rise in Covid-19 related spending.

The CZI survey sighted earlier in this article, revealed that the cost of mitigating the impact of Covid-19 as a percentage of the companies’ annual expenditure budget was estimated at 14 percent on average with surveyed companies using up to $1 162 142 and US$768 357 on average.

“The costs of more frequent cleaning and sanitising in our stores to protect our staff and customers from Covid-19 also add to the cost of operating,” said Mr Siyavora.

But ultimately he said “it would be good for quick recovery to benefit from a stimulus package, but sustainable recovery would come from improved supply of products for sale”.

Meanwhile, a Simbisa Brands official who declined to be named, said the food outlet was temporarily suspending contracts for all its contract workers during the lockdown period as the food giant begins to feel the impact of the national shutdown.

“Let us make it clear, we are not firing these people. We are just saying in view of low demand they should stay at home. We cannot fire these contract workers because we have invested a lot in them through training and other staff development programmes,” said the official.

Some of the popular Simbisa Brands outlets are — Chicken Inn, Creamy Inn, Bakers Inn among others. – Herald

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