Saturday, 15 August 2020

FOREX ALLOWANCES FOR INGWEBU BOARD MEMBERS


BOARD members for Bulawayo’s Ingwebu Breweries will soon start receiving sitting allowances in foreign currency after the company posted a huge chunk of its profits in hard currency.

However, this could put the brewery company at loggerhead with its workers, who are still getting paid in local currency.

According to the proposal by the company management, the Bulawayo Municipal Commercial Undertaking (BMCU) owned entity noted that 61 percent of its revenue was in forex, hence the justification to pay board members in hard currency.

BMCU is wholly owned by the Bulawayo City Council. According to the proposal to its shareholder, Ingwebu management noted that the sitting allowances for board members have been eroded in value hence the need to revert to paying in foreign currency. 

“The organisation’s forex revenue is currently 61 percent of total turnover. Our proposal is that the foreign currency component of our proposed sitting allowances be paid based on the foreign currency to total turnover percentage with the balance paid in local currency at the prevailing auction rate at the date of payment,” reads part of the proposal.

According to the new allowances the board chairperson will get US$210 for a board meeting and US$195 for a committee meeting, the vice-chairperson will get US$190 for a board meeting and US$175 for a committee meeting while board members will get US$175 for a board meeting and US$155 for committee meetings. In deliberating on the matter councillors, however, felt that this could lead to staff members also demanding a foreign currency-based salary.

“Their (Ingwebu management) was that this would be a way of ensuring that their members made meaningful contribution and remained keen to attend board meetings, unlike a situation where they brought their knowledge to the table but were not equally rewarded for it. A good reward would result in board members being fully committed to their roles so that the business continued to benefit from their contributions,” reads a council confidential report on the matter.

Early this year the brewery shelved plans of looking for an investor to inject US$20 million into the entity with the beverages producer reporting that it had come out from a loss-making position to a sound financial footing following the successful implementation of a turnaround strategy.

The turnaround strategy, saw Ingwebu introducing new product lines like the 1,5 litre and 2-litre calabashes of opaque beer and diversifying operations into mahewu production as well as continued improvement in capacity utilisation levels to 95 percent from 65 percent in the previous years. Sunday News

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