Nigerian Breweries pledges revival of manufacturing plants

NIGERIA – Heineken-backed Nigerian Breweries (NB) has reaffirmed its commitment to reviving the operation of its manufacturing plants in Imo and Kaduna states, assuring stakeholders and the public of its dedication to operational sustainability.  

This assurance was delivered by the company’s Managing Director, Hans Essaadi, during a pre-AGM media briefing in Lagos. 

 Essaadi addressed recent announcements regarding the temporary closure of the two facilities, citing operational concerns and a record foreign exchange loss of N153 billion in the 2023 fiscal year due to the devaluation of the Naira.  

He emphasized that the closure was temporary and underscored the company’s determination to address underlying factors and restore the plants to full capacity. 

 Uaboi Agbebaku, the company’s secretary, outlined NB’s business recovery plan for 2024, highlighting measures for a company-wide reorganization aimed at securing a resilient and sustainable future.  

This includes raising N600 billion via rights issue to offset the company’s significant debt burden, both foreign and local, which has negatively impacted profitability. 

 Agbebaku explained, “The additional capital raised via Rights Issue will be used for payments of all overdue FX debts and payables, eliminate FX exposure, and strengthen the company’s balance sheet and liquidity position, returning it to the path of net profitability as soon as possible.”  

He noted that Heineken Plc, the majority shareholder, had committed to raising over 50 percent of the N600 billion target. 

Additionally, NB announced its acquisition of Distell Wines and Spirits, a strategic move to diversify its product portfolio and strengthen its market position. 

 The acquisition, expected to be completed in the second quarter of the year, will enhance NB’s presence in the wider beverages market by offering new portfolios in wines, spirits, and flavored beverages.  

Essaadi emphasized the strategic importance of the acquisition in aligning with NB’s “beyond beer” agenda and enhancing long-term profitability. 

 The decision to acquire an 80 percent stake in Distell Wines and Spirits Nigeria Limited was made in June 2023, reflecting NB’s commitment to capturing growth opportunities in the wines and spirits segment.  

Essaadi also revealed that its majority shareholder, Heineken NV, was committed to taking its share of the rights issue when it opened. Heineken holds about a 57 per cent stake in NB. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE