Nigerian Breweries Plc has indicated plans for a company-wide reorganisation which include the temporary suspension of operations in two of its nine breweries.
In a statement, the company emphasized its commitment to minimizing the impact on its workforce by exploring all feasible alternatives.
These measures include relocating and redistributing employees to the remaining seven breweries and offering support and severance packages to those that become unavoidably affected.
According to the company, following the recent announcement of its Business Recovery Plan, Nigerian Breweries Plc has indicated plans for a company-wide reorganisation aimed at securing a resilient and sustainable future for its stakeholders.
The statement signed by Sade Morgan, Corporate Affairs Director, noted that this move is essential to improve the company’s operational efficiency, financial stability and enable a return of the business to profitability, in the face of the persistently challenging business environment.
In letters signed by the company’s Human Resource Director, Grace Omo-Lamai, and addressed to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), the company informed both Unions that its proposed plan would include operational efficiency measures and a company-wide reorganisation that includes the temporary suspension of operations in two of its nine breweries.
As a result, and in accordance with labour requirements, the Company invited the Unions to discussions on the implications of the proposed measures,” the company said
The company recalled that recently it notified the Nigerian Exchange Group (NGX) of its plan to raise capital of up to ₦600 billion (Six Hundred billion naira) by way of a rights issue, as a means of restoring the company’s balance sheet to a healthy position following the net finance expenses of N189 billion recorded in 2023 driven mainly by a foreign exchange loss of N153 billion resulting from the devaluation of the naira.
Speaking on these developments, Managing Director/CEO Nigerian Breweries Plc, Hans Essaadi, described the business recovery plan as strategic and vital for business continuity:
“The tough business landscape characterised by double-digit inflation rates, naira devaluation, FX challenges and diminished consumer spend has taken its toll on many businesses, including ours. This is why we have taken the decision to further consolidate our business operations for efficient cost management and optimal use of our resources for future sustainable growth”.
“We recognize and regret the impact that the suspension of brewery operations in the two affected locations may have on our employees. We are committed to limiting the impact on our people as much as possible by exhausting all options available including the relocation and redistribution of employees to our other 7 breweries; and providing strong support and severance packages to all those that become unavoidably affected. We are also committed to supporting our host communities in ways that ensure they continue to feel our presence.
“We remain wholly committed to having a positive impact on our host communities and our consumers; leveraging our strong supply chain footprint; excellent execution of our route to market strategy; and our rich portfolio of brands across the Lager, Stout, Malt, Soft drinks, and Energy drinks categories; and more recently, Wines and Spirits with the acquisition of Distell”, he added.
The company also recalled that it recently added to its broad portfolio with the acquisition of an 80% business stake in Distell Wines and Spirits Limited, a local business in the wines and spirits category, as a demonstration of its resilient and forward-thinking strategy to deliver long-term value creation for its shareholders and other stakeholders.
The Nigerian Breweries’ Business Recovery Plan includes a rights issue and a company-wide reorganisation exercise which includes temporary suspension of two of its nine breweries and an optimisation of production capacity in the other seven breweries, some of which have received significant capital investment in recent years.
Source: Nairametrics
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