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Suspends operations in 2 of its 9 breweries
Onome Amuge
Facing a persistent and formidable business environment, Nigerian Breweries Plc has announced a comprehensive business recovery plan, aimed at strengthening the company’s position and ensuring a brighter, more sustainable future for all stakeholders.
Central to this plan is a comprehensive company-wide reorganisation effort, designed to enhance efficiency across all aspects of the business, streamline operations, and bolster financial stability. Another key element of the reorganisation plan is the temporary suspension of operations in two out of its nine breweries, and an
optimisation of production capacity in the other seven breweries, some of which have received significant capital investment in recent years.
In a recent communication to the leadership of of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB),Grace Omo-Lamai, Nigerian Breweries Plc human resource director, disclosed the company’s intention to embark on a comprehensive company-wide reorganisation. The purpose of this reorganisation, Omo-Lamai explained, is to optimise operational efficiency, strengthen financial stability, and ensure long-term sustainability for the business.
Aligned with labour regulations, Nigerian Breweries Plc has extended an invitation to both NUFBTE and FOBTOB for discussions. This engagement with the unions, it stated, is crucial to ensure compliance with labour laws and guarantee that the interests of all parties are taken into account as the company embarks on its ambitious restructuring journey.
Prior to the recent development, Nigerian Breweries Plc had informed the Nigerian Exchange Group (NGX) of its intention to raise up to N600 billion through a rights issue, a strategic move aimed at shoring up the company’s balance sheet and restoring financial health.
The company’s financial performance in 2023 had been significantly impacted by a net finance expense of N189 billion, largely attributed to a N153 billion foreign exchange loss due to naira devaluation.
In response to the latest developments, Hans Essaadi,the managing director and CEO of Nigerian Breweries Plc, has weighed in on the business recovery plan. He underscored its significance as a strategic and indispensable measure to ensure business continuity and long-term resilience in the face of the challenging economic conditions.
Essaadi underlined the challenging business landscape as the impetus behind the company’s strategic business recovery plan. He explained that the current economic situation, with its steep inflation rates, naira devaluation, complex foreign exchange challenges, and decreased consumer spending, has created an inhospitable environment for businesses, including Nigerian Breweries Plc. As such, the company CEO noted that consolidating the company’s business operations and efficiently managing costs are essential steps in preparing for a more stable and prosperous future.
In his words: “We recognize and regret the impact that the suspension of brewery operations in the two affected locations may have on our employees. We are committed to limiting the impact on our people as much as possible by exhausting all options available including the relocation and redistribution of employees to our other 7 breweries; and providing strong support and severance packages to all those that become unavoidably affected. We are also committed to supporting our host communities in ways that ensure they continue to feel our presence.
“We remain wholly committed to having a positive impact on our host communities and our consumers; leveraging our strong supply chain footprint; excellent execution of our route to market strategy; and our rich portfolio of brands across the Lager, Stout, Malt, Soft drinks, and Energy drinks categories; and more recently, Wines and Spirits with the acquisition of Distell.”
In a clear display of its resilient, forward-thinking approach, Nigerian Breweries Plc has recently acquired an 80 per cent stake in Distell Wines and Spirits Limited, a local wine and spirits business. This strategic acquisition is part of the company’s broader plan to expand its portfolio, diversify its offerings, and ultimately drive long-term value creation for shareholders and other stakeholders, despite the challenging business environment.
Embarking on its eighth decade of operations, Nigerian Breweries Plc has proven itself to be a pillar of the Nigerian economy and a symbol of unwavering commitment to the local market and its people.
Amidst a volatile economic climate, the company has continued to demonstrate its adaptability and resilience, while staying true to its core values and principles, ensuring that the Nigerian people remain at the heart of its operations.
