Beer market growing strong in Nigeria despite country’s harsh economy – Brewery boss

Irrespective of economic challenges facing the Nigerian manufacturing sector, the beer market has retained a strong growth potential for the years ahead.

The brewery’s Chief Executive Officer, Hans Essaadi, made this known at the company’s pre-Annual General Meeting (AGM) media briefing on Thursday, 7 April, in Lagos, NAN reports.

Mr. Essaadi said that the Nigerian beer market fundamentals was strong with a high growth potential due to its teeming population despite the Russia-Ukraine crisis.

He assured shareholders of enhanced dividends in the years ahead despite the challenging operating environment.

He noted that the company was well-positioned to ensure enhanced return on investment to all its stakeholders.

“We will continue to deliver sustainable growth to our shareholders through our wide range of products,” he said.

Mr. Essaadi noted that the company recommended a total dividend of N12.9 billion, culminating to N1.60 per share, due to every shareholder of the company for the 2021 financial year.

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According to him, the dividend was against N7.5 billion paid in the comparative period of 2020.

Mr. Essaadi noted that the high cost of living and increased price in the cost of fuel, particularly diesel, was currently slowing the growth of the Fast Moving Consumer Goods (FMCG) sector.

He said the company had remained dynamic and resilient with its processes, which enabled it to weather the storm in the past 75 years.

“The deteriorating foreign exchange situation has led to foreign suppliers running out of patience with their Nigerian partners, mostly manufacturers who are finding it difficult to settle their rising foreign payables.

“Our outstanding foreign payables rose by 76 per cent in 2021 and due to lack of foreign exchange, the task of procuring input materials has been difficult and this hampered the completion of our capacity extension plan.

“With the re-introduction of excise duty on non-alcoholic beverages and increase in excise duty rate for alcoholic beverages, these additional costs will lead to an increase in the price of the finished product.

“Volatility in the brewery sector is expected but we feel confident in our ability to grow and we have our pricing strategy as well as the cost and value agenda to maintain leadership in the market,” he said.

Mr. Essaadi added that the company would sustain shareholders’ value and meet consumer demands in the current year.

The Company Secretary, Uaboi Agbebaku, said that NB had created a share for cash dividend scheme that would enable investors to reinvest in the company and buy new shares with their dividend.

Mr. Agbebaku said the initiative was introduced for foreign investors that might face dividend repatriation challenges due to foreign exchange scarcity.

He said under the share for cash arrangement, both local and foreign investors would have the opportunity to either receive cash or buy new shares with their dividend.

Mr. Agbebaku explained that those that would opt for the new shares were expected to complete a share for cash dividend election scheme form before April 12.

“This is the third year we are doing this. What we saw in the second year was that there was a remarkable improvement over the first time.

“More people are beginning to appreciate the benefit of doing this and so our expectation is that this year, there would be a higher uptake in terms of the number of investors that will opt for the scheme.

“As for whether the scheme has come to stay, the situation might not necessarily be the same when we took the decision and that will determine whether we want to keep it or not,” he said.

The company’s Supply Chain Director, Martin Kochl, said the company recognized the importance of sustainable local sourcing of its agricultural raw materials and commercialization of local raw materials.

Mr. KochI said the company was making conscious efforts to partner with local and international research institutes to improve the performance and adaptability of registered sorghum varieties.

“We expect the tonnage to increase again and we are working with a whole number of partners, research institutes to increase local sourcing and introduce higher yield sorghum varieties in the market and we are exploring other alternatives,” he said.

Beer market growing strong in Nigeria despite country’s harsh economy – Brewery boss Beer market growing strong in Nigeria despite country’s harsh economy – Brewery boss Reviewed by Africa Info on Sunday, April 10, 2022 Rating: 5

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