Nigerian Breweries Plc is undergoing a comprehensive restructuring process, temporarily closing two of its nine breweries as part of its reorganisation strategy. The organisation prioritised reducing the effects on its employees by thoroughly investigating every possible option. The strategies involve transferring and dispersing staff to the seven breweries still operating and providing assistance and severance benefits to those impacted beyond their control. According to the company’s statement, Nigerian Breweries Plc is implementing a company-wide reorganisation in response to its Business Recovery Plan to ensure a strong and lasting future for all involved parties.
The Corporate Affairs Director, Sade Morgan, emphasised in a signed statement that this action is crucial for enhancing the company’s operational effectiveness and financial strength, ultimately leading to a profitable outcome despite the ongoing difficulties in the business landscape. Letters signed by the company’s Human Resource Director, Grace Omo-Lamai, were sent to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), informing them of the company’s plan to implement operational efficiency measures and a company-wide reorganisation.
Challenging economic conditions impact businesses due to high inflation.
This resulted in the company extending an invitation to the Unions to discuss the potential impacts of the planned actions on labour needs. In the company statement, the corporation recently informed the Nigerian Exchange Group (NGX) about its intention to raise ₦600 billion through a rights issue. The company is working towards recovering from a challenging financial year in 2023, with significant net finance expenses totalling ₦189 billion. Most of these expenses were due to a foreign exchange loss of ₦153 billion caused by the devaluation of the naira. This effort aims to return the company’s balance sheet to a strong and stable position.
Hans Essaadi, the Managing Director/CEO of Nigerian Breweries Plc, emphasised the importance of the strategic business recovery plan for ensuring continuous operations. Many businesses feel the impact of the challenging economic environment, with high inflation rates, currency devaluation, foreign exchange difficulties, and decreased consumer spending, all contributing to their struggles. As a result, these businesses are now focusing on consolidating their operations to reduce costs and make the best use of resources for long-term growth and sustainability.
Substantial support and packages will be given to those affected.
Acknowledging the repercussions of suspending brewery operations at two locations, they express remorse for employees’ hardships. They pledge to minimise the impact by exploring various solutions, such as transferring staff to the remaining seven breweries and offering substantial support and severance packages to those affected. Their dedication extends to providing ongoing support for their communities, ensuring their impact is felt long after they have left. Their dedication to making a positive difference in the communities they serve and to their customers is unwavering.
They can significantly impact the industry by utilising their robust supply chain network, effective route-to-market strategy, and diverse range of brands, which include Soft drinks, Stout, Lager Energy drinks, Malt, and now Wines and Spirits through the acquisition of Distell. The company’s recent addition of an 80% business stake in Distell Wines and Spirits Limited showcases its commitment to expanding its diverse portfolio. This strategic move demonstrates resilience and highlights a forward-thinking approach to generating lasting value for shareholders and others.
Related Article: Breweries, Crossboundary Sign $10m Contract
During economic downturns, businesses may experience a decrease in sales and revenue due to reduced consumer spending and confidence. This can lead to cash flow problems, difficulty in meeting financial obligations such as paying salaries and bills, and ultimately result in layoffs and closures of businesses. It can also lead to increased competition among businesses as they struggle to maintain their market share. This can result in price wars and pressure to cut costs, leading to lower profit margins.
Related Link
Nigerian Breweries Plc: Website
