Nigerian Brewers Striding Confidently in an Unstable Economy

The Nigerian Economic landscape has witnessed unprecedented headwinds in recent times. However, the brewery Industry seems to be doing well amidst these economic avalanches.

No doubt the uncertainty in the economy occasioned by the age of global oil glut and falling prices, has created a sense of panic and caution in the economies of oil producing nations, who have resorted to many stringent fiscal policies to buffer the negative impact.

One of such solutions was the austerity measure adopted by the Nigerian government, which translates into a cut in expenditure.

Being a mono-product economy depending solely on oil, it is given that whatever affects the price of the commodity will equally affect Nigeria’s planning and budget.

Speaking against this backdrop the coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said the decision to trim down revenue projection was part of measures to maintain economic stability, boost oil revenues, reduce waste and plug loopholes. So, the government will introduce Luxury Good tax and restrict foreign travels and training for civil servants, among other measures. Therefore from official quarters, this new austerity measures were meant to insulate the economy from the falling crude oil prices which is a global issue.

Though some financial analysts criticised the development, others considered it a welcome development for the purpose of continuity. For some of them, every time and season in life comes with its own challenges, the oil producing countries of the world are currently passing through their own trying time, and Nigeria is not an exception. All Nigerians need to do now is to ensure that all hands are deck in order to come out with a workable solution.

In all these, the Nigerian Beer Industry seems to be waxing stronger, with Guinness Nigeria signing a memorandum of understanding of about ten billion naira with Standard Chartered Bank recently in Lagos in order to jack up business activities and give shareholders a good value for their investment.

On the other hand, Nigeria Breweries has promised their shareholders a mouth-watering return on investment for the year 2014, an indication that the company did well despite the dwindling economy.

Speaking on shareholders dividend for the year 2014 at a pre annual general meeting press briefing in Lagos, the Managing Director, Nigeria Breweries PLC, Mr. Nicolaas Vervelde disclosed that; “the directors are pleased to recommend to shareholders at the forthcoming Annual General Meeting, the declaration of a total dividend of thirty seven billion, two hundred and five million, two and thirty three thousand, six hundred and forty eight naira only.”

According to him, the Directors accept responsibility for the preparation of the annual financial statements to give a true and fair view in accordance with the International Financial Reporting Standards (IFRS} and in the manner required by the Companies and Allied Matters Act of Nigeria, Cap C20, Law a of the Federation of Nigeria, 2004, and the Financial Council Reporting Council of Nigeria.

Commenting on the merger between Nigeria Breweries and Consolidated Breweries PLC, he noted that; “following the merger with Consolidated Breweries Plc, the enlarged company obtained an eighty nine per cent equity interest in the Benue Bottling company. The subsidiary is an entity with no business activities that holds land, buildings and some idle production assets.”

While reviewing the company’s operation for the year under review, he said that; “in the course of the year under review, the company concluded the legal process which culminated in a merger with Consolidated Breweries Plc resulting in an enlarged company. The statements of financial position for the year are therefore a combination of the financial position of the old Nigerian Breweries Plc and dissolved Consolidated Breweries Plc”.

Reacting to the impact of the company in the agricultural sector of the Nigerian economic, he said that it has been positive. His word; “the company, in conjunction with Heineken Supply Chain B.V. of the Netherlands and other Heineken companies, is involved in activities aimed at development of new hybrid sorghum varieties, with potential of increasing the yield/output for  sorghum farmers as well as improving the quality of sorghum malt, which is a major input in our operations. Two high-yielding hybrid sorghum varieties have been developed and registered by the company; the process of commercialising their production is on-going. The company has a subsisting consultancy agreement with Nigeria professor on the development of sorghum seeds”.

Though the Managing Director admitted the fact that, the insecurity challenges in some part of the country had an effect on the distribution of their products, but that does not stop them from employing Nigerians in their various breweries across the country. On the employments standard, he stated that the company does not discriminate when it comes to employments.

His words; “Nigerian Breweries Plc is an equal opportunity employer and does not discriminate on any grounds. Thus, we provide employment opportunities to physically challenged persons. However, this also goes beyond the need to ensure that there is no discrimination against such persons, but driven by a deep conviction that even in disability, there could be immense ability. At present, we have eight physically challenged persons on our employment.”

For him, one of the things that keep them going despite the economic down tone is their cost leadership which has help them to remain strong and even new break grounds in terms of brand exploration.