Refusing to be reduced by Nigerian Current Economic Woes … NBL PLC
Chigozie Amadi
Despite the harsh operating climate and dire challenges that marked the 2023 financial year, Nigerian Breweries PLC insists that greater feat and heights are in the company’s horizon.
Addressing the media at their Pre -AGM media briefing at Sheraton Hotel, Ikeja, today, the Managing Director/CEO, Mr. Hans Essadi, said the company had to embark on some consumer driven innovations in order to stay afloat.
Quoting Maya Angelou he explained ” We may not control all the events that happened to us, but we can decide not to be reduced by them”.
Nigerian Breweries which is regarded as a giant in the industry, has been around for 78 years and despite all the strategies tried, to mitigate the extenuating circumstances that ruled the Nigerian Operating environment in 2023, it posted a loss after tax of N105,769m. This was against the profit after tax of N13.9m in 2022.
Mr. Essadi went on to explain that NB PLC is a company that cares about sustainability and responsibility but it faced external circumstances beyond it’s control in year 2023, starting with the currency redesign policy of the Central Bank at the close of 2022. The situation led to a nationwide liquidity crisis with severe impact on social, economic and productive activities and a contraction of many critical sectors of the economy including a near collapse of the large informal sector that relies on cash transactions. There was also the tension and uncertainties that pervaded the nation in the run-up to the general elections of February 2023, which also impacted socio- economic activities.
To worsen matters, the new administration, led by President Tinubu, which came in May 2023, in a bid to address some of the perennial macroeconomic volatilities in the country, removed the subsidy on premium motor spirit(petrol) and floated the Naira, having decided to allow market forces dictate the foreign exchange rate. This immediately resulted in about 300% increase in the pump price of petrol with huge impact on the cost of transportation, energy and other utilities, as well as a drastic reduction in the purchasing power of the citizenry.
The floating of the Naira had a devastating effect on businesses struggling to access Forex for imports of raw materials as there was a massive devaluation of the Naira by more than 200% in one year. There was also huge spike in import costs and revaluation of forex payables to overseas partners, which caused huge foreign exchange losses for many businesses including NB PLC.
All of the above and more resulted in the company posting a loss and will be unable to pay dividends to shareholders this year.
Despite all the challenges NB PLC thrives on innovation and has already gotten board approval to float a rights issue of N600 billion, which the management hopes, will wipe off their foreign indeptedness and help them get back to profitablity ways. Optimistic that the rights issue will not be unsubscribed, the Finance director ,Mr. Wessels Boer said that they already have the approval of their main shareholder, Heineken N.V. of Netherlands to go ahead with the offer.
Reiterating the confidence that the rights offer will be successful, Mr. Agbebaku, the company’s Legal Director, said that their Nigerian shareholders were mainly state governments and parastatals who he belies would take up their rights.
NB PLC boasts of many brands in the lager beer category like Heineken, legend lager, Goldberg lager, Tiger , Goldberg Black ( a dark lager with unique caramel flavor), life continental and More lager( which is 100% locally sourced raw material).
Maltina is the biggest brand in the company’s portfolio. They also have brands like Ace Bitters which is among the top 5 in the bitters market. Other brands in the company’s kit include Fayrouz, desperadoes, Zagg( fusion of malt and energy drink), Hi-malt, Turbo king, an economy stout
