Nigerian Breweries To Shut Down 2 Plants Over Operational And Financial Challenges

THE Nigerian Breweries, the country's first and biggest brewer, has announced that, in response to a number of operational and financial challenges, it will restructure its whole business.

Through a note to the Nigerian Exchange Limited, the company announced this on Tuesday, April 16.

A record foreign exchange loss in 2023 is one operational risk that has forced the corporation to liquidate two of its nine factories.

Repositioning Heineken Brouwerijen B.V.'s Nigerian subsidiary for a sustainable future that benefits stakeholders became imperative.

Nigerian Breweries had its largest loss after taxes in 2023 since it started operations in the nation 77 years ago due to a net loss on foreign exchange transactions totaling N153.3 billion.

Imports account for over half of the business's input expenditures, which also include the money spent on raw materials.

The beer manufacturer claims that a number of difficult economic conditions, including increased operating costs, ongoing pressure on consumer disposable income, rising rates of inflation, and volatile foreign exchange, were the cause of the N106.3 billion net loss reported in 2023.

The decision to suspend has been communicated to labor organizations, such as the Food Beverage and Tobacco Senior Staff Association and the National Union of Food, Beverage, and Tobacco Employees.

Among the operational efficiency measures the firm plans to implement in the coming days are job layoffs, with discussions with the two unions already scheduled to address the repercussions of such a decision.

“We recognize and regret the impact that the suspension of brewery operations in the two affected locations may have on our employees,” said Hans Essaadi, the Managing Director of the company.

“We are committed to limiting the impact on people as far as possible and providing strong support and severance packages to all affected.”

To enable the management to get funds from present shareholders in return for new shares, a rights issue is being considered. This is an attempt to raise new funds that could be able to give the struggling brewer a second chance.