Citing tough business climate due to double-digit inflation rate, naira devaluation, FX challenges and diminished consumer spending, the Nigerian Breweries Plc has announced plan to temporarily shut two out of its nine production plants in Nigeria.
The leading beverage company in Nigeria said that the temporary closure was part of its Business Recovery Plan resulting in company-wide reorganisation to improve the its operational efficiency, financial stability and enable a return of the business to profitability amid the persistently challenging business environment.
The company, in a statement signed by its Corporate Affairs Director, Sade Morgan, however highlighted its commitment to minimising the impact of the closure on its workforce by exploring all feasible alternatives.
Morgan highlighted such measures to include relocating and redistributing the company’s employees to the other seven breweries, and supporting those that will be unavoidably affected with severance packages.
The company noted that it had conveyed the decision through letters to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB) in accordance with labour requirements.
It disclosed that the letter through Grace Omo-Lamai, the company’s Human Resource Director, informed both Unions that its proposed plan would include operational efficiency measures and a company-wide reorganisation that includes the temporary suspension of operations in those two breweries.
“As a result, and in accordance with labour requirements, the Company invited the Unions to discussions on the implications of the proposed measures,” the company said
Nigerian Breweries Plc reminded that it recently informed the Nigerian Exchange Group (NGX) of its plan to raise ₦600 billion capital via rights issue to restore the company’s balance sheet to a healthy position following the net finance expenses of N189 billion recorded in 2023 driven mainly by a foreign exchange loss of N153 billion resulting from the devaluation of the naira.
Managing Director/CEO of Nigerian Breweries Plc, Hans Essaadi, had underscored the business recovery plan as strategic and vital for business continuity.
“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 said.
He expressed concern and the company’s commitment to limiting the impact on the staff while supporting those that would be inescapably affected with severance packages.
Speaking on the impact of the closure on the host communities, Essaadi assured that the company will continue to support them in ways that ensure they continue to feel its 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”, he added.