Nigerian Breweries targets improved earnings despite N25.8 billion duty
Nigerian Breweries Plc is confident of a positive financial year despite the challenging operating environment for manufacturing in the country.
Indeed, the brewing firm observed that the operating environment in the first quarter (Q1) 2019, remained challenging and similar to 2018, but expressed confidence in its clear strategy to deliver good return on investment for all its stakeholders.
Although the Federal Government promised to review the proposed rise in duty, but has planned another wave of Excise Duty increase on beer for 2019.
This is expected to come into effect by mid-year, and will lead to rate hike from the N30 per litre introduced in 2018 to N35 per litre.
The brewer in 2018 incurred N25.8 billion as excise duty expenses, for which the Managing Director and Chief Executive Officer, Jordi Borrut Bel, said company results for the year were adversely impacted by the increase excise duty rates.
This is in addition to a challenging environment and the double digit inflation rate, which he said is penalising the business community.
Meanwhile, the Corporate Affairs Director, Nigerian Breweries Plc, Sade Morgan, said plans are underway to take its current 57 per cent local sourcing of its raw materials to 60 per cent, saying the company would be working with Nigerian farmers to achieve the feat.
Borrut Bel at its pre-AGM media briefing in Lagos, yesterday, however said the Nigerian economy presents challenges and opportunities, while also restating the company’s commitment to winning with Nigeria.
“We want to win with the Nigerian societies and communities because we believe in Africa’s biggest market with a young and dynamic population showing promising indicators for growth. We also believe that the country’s demographics will play a huge role in the future,” he said.
He said going forward, the company would prioritise developmental efforts through its three pillars of growth.
“These include expanding leadership in premium brands, build scale in mainstream to drive malt growth by leveraging on innovation and improving end to end productivity,” he said.
Exporting on the local sourcing, Morgan said the company has also deployed the use of innovation to reduce its water usage by 41 per cent, while also reducing the level of its carbon emissions.
She said the company has also impacted over 20,000 people since the inception of its advocating responsible consumption campaign.
The Marketing Director, Emmanuel Oriakhi, on his part assured that Nigeria Breweries would continue to produce top quality brands to meet the ever changing needs of the Nigerian consumer, stressing that with the help of its robust portfolio, it would ensure consumers get value for their hard earned money.
“The quality of our brands cannot be questioned anywhere in the world and we are here for the long haul and we will continue to introduce innovative and quality products for the Nigerian markets,” he said.