Guinness Nigeria beefs up spirits production with launch of new US$2.2m line

NIGERIA – Guinness Nigeria Plc, a subsidiary of Diageo Plc, has commissioned a new Spirits production line at its Ogba brewery in Lagos.

The new line, part of the brewer’s Mainstream Spirit Capacity expansion programme with a cost of £2.0m (US$2.2m), avails an additional cube packaging line to meet increased demand for the company’s mainstream spirits portfolio.

According to reports by Vanguard, the facility is expected to produce about 600,000 EUs of the company’s iconic spirits brands including Orijin Bitters per year, in different sizes and formats desired by consumers.

With this line, Guinness Nigeria will offer a wider variety of products to consumers at a more affordable price point.

The “Cube 2” product line was commissioned by the President, Diageo Africa, John O’Keeffe accompanied by the British deputy high commissioner to Nigeria, Mr. Ben Llewellyn-Jones.

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The managing director of Guinness Nigeria, Baker Magunda said the company is determined to ensure that it meets the demands of its esteemed and loyal consumers who have believed in the iconic brands from the company for over seven decades.

“What we have today is a reflection of our ambition to grow our investments and the focus on optimizing our capital expenditure.

“This investment forms a key part of our supply strategy for meeting the increasing demands for brands in our portfolio and particularly our spirit drinks to satisfy our customers,” Magunda said.

Speaking on Guinness’ support to government’s efforts across Africa to grow their economies through effective backward integration, president, Diageo Africa, John O’Keeffe said the company is determined to support these initiatives with the right investments.

The brewery giant disclosed that as part its broader local raw materials (LRM) sourcing, it is looking to increase locally sourced production inputs to 70% in the coming years and this fits in nicely with Diageo’s ambition to get LRM sourcing across the continent.

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The recent investment is an addition to the new spirit line opened by the alcohol maker in 2016 when it took over the distribution rights of Diageo’s International Premium Spirits (IPS) brands in Nigeria.

The N4.8billion (US$11.6m) production line, designed with a capacity of 1.2 million cases, kick started local production of previously imported spirits such as Smirnoff, Gordon’s, McDowell’s among others.

The recent development is expected to help boost the financial fortunes of Guinness Nigeria which in its full year results for the period ended 30 June 2021, revealing a 110% increase in profit after tax mainly driven by strong revenue growth across all key categories.

Profit after tax rebounded to N1.25billion (US$3.03 million) from a loss of N12.6billion (US$30.58 million) reported in 2020.

Revenue, the major profit driver, increased 54% to N160 billion (US$390 million) in 2021 from N104.4 billion (US$250 million) reported in 2020.

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