One in five bakeries may shut down

One in five bakeries may shut down
Updated 08 November 2013

One in five bakeries may shut down

One in five bakeries may shut down

One in five bakeries are likely to shut down due to a shortage of foreign workers, according to industry experts.
Investors in the bakery sector are expected to leave the market because bakery owners can no longer work at full capacity in view of the labor shortage, said Fahd Al-Salman, chairman of the National Committee for Bakeries at the Council of Saudi Chambers.
Besides, the reluctance of Saudis to work in the sector will limit the nationalization percentage in bakery industry.
Al-Salman said that several automatic and semi-automatic bakeries were forced to stop production in Makkah, Jeddah and Madinah, particularly because of the shortage of foreign workers.
Production rates have dropped at bakeries, especially during the Haj and Umrah season.
He said this issue has contributed to the increased popularity of one-man bakeries. Some of these work in unhealthy conditions and without government oversight.
“This mushrooming of neighborhood bakeries is evidence in itself of the shortage of bread supplies,” said Al-Salman.
According to Al-Salman, the average consumer turns to these bakeries for basic necessities even though he knows that such bakeries operate in unhealthy conditions.
He said municipalities and other bodies should halt the process of granting licenses to bakeries or reduce their numbers as much as possible. “At the same time, authorities should support automatic and semi-automatic bakeries because such establishments comply with health requirements to meet consumer needs,” he said.
“There is only a 7 to 10 percent nationalization rate at bakeries. The recently implemented labor laws prompted several bakeries to fire workers not sponsored by them although no Saudis were available to do the job.”
Several semi-automatic bakeries were forced to stop production in view of the difficulties facing investment in the sector.
The implementation of the Nitaqat (nationalization) program that aims to boost the Suadi to non-Saudi ratio, however, should not extend to small, manual bakeries, many have said. These employ on average three workers and work under licenses from the municipality.
Al-Salman said efforts are being made to meet with the labor minister and brief him about the situation. “Most bakeries work 18 continuous hours, which require a two-shift work schedule.”
He said the labor system grants visas according to the size of the bakery. The system grants 23 visas per 1,000 meters. “But automatic and semi-automatic bakeries work on seven production lines. Every line needs about 15 workers, not to mention the warehouses and the packaging, cleaning and sales divisions,” he said.
He suggested that the ministry deal with medium and large-scale bakeries in terms of the number of workers according to its production capacity, not the space area of the facility. The Grain Silos and Flour Mills Organization can provide exact figures on flour quantities used by each bakery.
Adnan Said Fakeih, member of the National Committee for Bakeries at the Saudi Council of Chambers, feared 20 percent of the existing bakeries would close down if the situation did not change.
“The owners of bakeries are anticipating some concessions from the authorities after the commencement of the inspection raids,” he added.