Nigerian Breweries Plc, a leading beverage manufacturer, has announced a strategic reorganization which includes the temporary closure of two out of its nine breweries in Nigeria.
This move is part of a comprehensive business recovery plan aimed at enhancing operational efficiency, stabilizing finances, and ensuring profitability amid a challenging economic environment.
According to a statement by Sade Morgan, the Corporate Affairs Director, the decision reflects the company’s commitment to mitigating the impact on employees.
“We are dedicated to minimizing the impact on our workforce by exploring practical options,” Morgan said.
These measures include reallocating employees across the remaining facilities and offering severance packages to those affected.
The reorganization details were outlined in letters from the company’s Human Resource head, Grace Omo-Lami, to the leadership of the National Union of Food, Beverage & Tobacco Senior Staff Association.
These letters invited union leaders to discuss the implications of the shutdowns and the broader restructuring efforts.
The company also disclosed its financial strategy to the Nigerian Exchange Group, including a plan to raise N600 billion in capital through a rights issue.
This move is to counteract the significant financial losses experienced in 2023, which included a net finance expense of N189 billion primarily driven by a foreign exchange loss of N153 billion due to the devaluation of the naira.
Hans Essaadi, Managing Director/CEO of Nigerian Breweries Plc, explained the tough decisions taken by the company: “The tough business landscape characterized 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 emphasized the company’s ongoing commitment to community and consumer engagement, stating, “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.”
