Nigerian Breweries Plc (NGX: NB) will be suspending operations at two of its nine breweries as part of a company-wide reorganisation.
In letters signed by the company’s Human Resource Director, Grace Omo-Lamai, and addressed to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), the company 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 two of its nine breweries. As a result, and in accordance with labour requirements, the Company invited the Unions to discussions on the implications of the proposed measures.
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The brewer currently operate nine breweries across the country. They are located in Lagos, Aba, Kaduna, Ibadan, Enugu, Ota, Ijebu-Ode, and Awo-Omamma.
In a statement by the brewer, the company reiterated its plans for a company-wide reorganisation aimed at securing a resilient and sustainable future for its stakeholders.
This move is essential to improve the company’s operational efficiency, financial stability and enable a return of the business to profitability, in the face of the persistently challenging business environment.
Nigerian Breweries reported a loss of ₦106.30 billion for the 2023 financial year ended 31st December, 2024. The loss is attributable to the net loss of ₦153.33 billion on foreign exchange transactions.
Investogist reported earlier in April that NB will be raising ₦600 billion capital by way of Rights Issue to address the company’s huge debt burden. The new capital will also help 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.
Speaking on these developments, Managing Director/CEO Nigerian Breweries Plc, Hans Essaadi described 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”.
“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 the relocation and redistribution of employees to our other 7 breweries; and providing strong support and severance packages to all those that become unavoidably affected. We are also committed to supporting our host communities in ways that ensure they continue to feel our 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.
It would be recalled that Nigerian Breweries recently added to its broad portfolio with the acquisition of an 80% business stake in Distell Wines and Spirits Limited, a local business in the wines and spirits category, as a demonstration of its resilient and forward-thinking strategy to deliver long-term value creation for its shareholders and other stakeholders.
About the Company
Nigerian Breweries Plc, a public company quoted on the Nigerian Stock Exchange, was incorporated in Nigeria on the 16th November 1946, under the name, Nigerian Brewery Limited. The name was changed on the 7th January 1957, to Nigerian Breweries Limited and thereafter to Nigerian Breweries Plc in 1990 when the Companies and Allied Matters Act (now repealed) of that year came into effect.
The Company is a subsidiary of Heineken N.V. of the Netherlands, the latter having approximately 57% interest in the equity of Nigerian Breweries Plc. The address of the Company’s registered office is 1 Abebe Village Road, Iganmu, Lagos. The Company is primarily involved in the brewing, marketing and selling of lager, stout, non-alcoholic drinks and soft drinks.
As a consequence of the merger with Consolidated Breweries Plc in 2014, the Group comprises of the Company and its 89.3% majority equity interest in Benue Bottling Company Limited (BBCL). The subsidiary, BBCL, was an entity with no business activities that held land, buildings and some idle production assets. The company has now been liquidated.
234 Stores Limited is also a subsidiary of the Company which was incorporated on 7th November 2018 to explore opportunities in the route-to-market. The subsidiary became fully operational in 2020 and its financial position has been consolidated in these financial statements.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
