Following the announcement of its Business Recovery Plan, Nigerian Breweries Plc has outlined plans for a comprehensive reorganisation. This initiative aims to enhance operational efficiency and financial stability in response to ongoing business challenges.
The company's Human Resource Director, Grace Omo-Lamai, addressed letters to the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB). The letters detailed a proposal that includes temporary suspension of operations at two of its nine breweries. Nigerian Breweries invited the unions for discussions regarding these measures.
Nigerian Breweries had previously informed the Nigerian Exchange Group (NGX) about plans to raise up to ₦600 billion through a Rights Issue. This move is intended to strengthen the company's balance sheet after incurring net finance expenses of N189 billion in 2023, primarily due to a foreign exchange loss from naira devaluation.
Hans Essaadi, Managing Director/CEO of Nigerian Breweries Plc, described the recovery plan as crucial: “The tough business landscape characterised by double-digit inflation rates, naira devaluation, FX challenges and diminished consumer spend has taken its toll on many businesses, including ours. This is why we have taken the decision to further consolidate our business operations for efficient cost management and optimal use of our resources for future sustainable growth.”
Essaadi acknowledged potential impacts on employees due to brewery suspensions: “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 relocation and redistribution of employees to our other 7 breweries; and providing strong support and severance packages to all those that become unavoidably affected.”
He also emphasized their commitment: “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 various categories.”
Recently, Nigerian Breweries expanded its portfolio with an 80% stake acquisition in Distell Wines and Spirits Limited. This move aligns with their strategic approach toward long-term value creation for shareholders.
The Business Recovery Plan encompasses a Rights Issue alongside a company-wide reorganisation involving temporary suspensions at certain breweries while optimizing production capacity elsewhere. Despite current challenges, Nigerian Breweries maintains dedication to Nigeria's future as a key player in its beverage industry.
Alerts Sign-up