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Nigerian Breweries Plc, a key player in the HEINEKEN Group and the foremost brewer in Nigeria, has unveiled a comprehensive restructuring strategy to navigate the current economic headwinds. This strategy involves a temporary halt in production at two of its nine local breweries.
The initiative, part of a broader business recovery blueprint, is designed to bolster the company’s operational effectiveness and financial health, ultimately steering it back to a profitable course amidst a tough economic climate.
Grace Omo-Lamai, the Human Resource Director of Nigerian Breweries, has formally communicated this plan to the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB) through official letters. The outlined strategy encompasses a series of operational efficiency enhancements and an extensive organisational overhaul, which necessitates the temporary cessation of activities at two brewing facilities.
In line with statutory labor protocols, Nigerian Breweries has extended an invitation to the unions for a dialogue to discuss the potential repercussions of the proposed restructuring efforts.
It would be recalled that the company recently notified the Nigerian Exchange Group (NGX) of its plan to raise capital of up to ₦600 billion (Six Hundred billion naira) by way of a Rights Issue, as a means of restoring 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 recognise 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 seven 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.
The Nigerian Breweries’ business recovery plan includes a Rights Issue and a company-wide reorganisation exercise which includes temporary suspension of two out of its nine breweries in the country and an optimisation of production capacity in the other seven breweries, some of which have received significant capital investment in recent years.
The company reaffirmed its commitment to the long-term future of Nigeria and “stands as a cornerstone of Nigeria’s beverage industry.”With over 77 years of operations, the company said it would continue to demonstrate its enduring commitment to the Nigerian market and its people.
Incorporated in 1946 as “Nigerian Brewery Limited,” NB Plc made history in June 1949 when the first bottle of STAR lager beer rolled out of its Lagos brewery bottling line.
Today, it has a rich portfolio of 21 high-quality brands, including iconic brands like Heineken, Desperados, Maltina, Life, Amstel Malta, Gulder, Fayrouz, and Legend produced from nine breweries and distributed nationwide.
NN Plc recently added to its 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.
