Local bread producers worried over influx of ‘foreign’ bakers

The bread industry in Ghana, a staple in the diets of the populace, has long been dominated by local producers. However, recent attention has turned to a new sprawling factory situated along the Accra-Tema motorway.

This development has raised concerns within the community, as fears grow that large-scale production might lead to the sidelining of smaller players.

Historically priced at GH¢5 a decade ago, the cost of a loaf of bread has experienced fluctuations due to exchange rate shifts and disruptions from global markets, such as the conflict in Ukraine. These changes in dimensions, weight, and flavour have prompted local bakers to navigate the intricate balance between production costs and retail prices, all with the aim of achieving a breakeven point.

The escalating expenses linked to bread production inputs have compelled producers to pass on the increased costs to consumers. This move has resulted in some local bakers closing shops, while others have clung on, hoping for more favourable conditions.

The bread industry remains a vital contributor to Ghana’s economy, generating employment opportunities across its value chain.

Visiting some key streets, Citi News observed retailers near the Kpone barrier diligently engaging potential customers, reflecting the perseverance driven by economic conditions despite narrow profit margins.

However, some hawkers mentioned that the current high prices make it challenging to sell a significant quantity of bread in a day, hampering their potential earnings.

Hot Oven Bread has managed to secure a notable market share in the Greater Accra and Volta regions. Nonetheless, the company has faced considerable challenges during its five-year existence, particularly due to the global economic crisis.

Coupled with local dynamics, these hurdles have led to rapid and substantial price increases in a short timeframe.

Fred Kwashie, the firm’s accountant, shed light on this journey, underscoring the industry’s profitability while highlighting the issue of high raw material costs, which are largely imported.

Kwashie is an advocate for safeguarding the local players in the industry from foreign intrusion.

He emphasizes that an industry of this nature should ideally be protected for the benefit of Ghanaians, expressing uncertainty about the government’s efforts to shield them from foreign giants with significant resources.

The bread industry’s landscape has evolved from small-scale operations to an industrial level, featuring established brands like Hot Oven and A1 bread, along with the emerging player, Amigo Bread, located along the motorway.

A subsidiary of BB Bakery under the Three Dreamer Manufacturing Company Limited, Amigo Bread intends to revolutionize the sector through the adoption of advanced machinery. Bismark Ofei-Ansah, the Executive Director, confidently asserts that the demand for bread remains robust, justifying the need for expansion.

Ofei-Ansah acknowledges the challenges tied to high production costs, encompassing factors such as power, water, and taxes.

He advocates for government intervention to address these pressing concerns. Ofei-Ansah’s own bread factory, currently undergoing tests, is positioned as one of the largest and is poised to officially launch in the coming weeks.

Amid ongoing debates surrounding the entry of both local and foreign participants into the expansive bread market, Paapa Baah, the Administrator of Bread Academy, which focuses on bread production training, advocates for inclusive growth.

While concerns persist about foreign competition, the prevailing sentiment leans towards the belief that there’s ample space for all participants within Ghana’s evolving bread industry.

 

Source: Citi News