Double digit inflation rate, herders/farmers killings pushing up OPEX—NBPlc
Managing Director and Chief Executive Officer, Nigerian Breweries Plc, Jordi Borrut Bel, has made case for the national economic management team to come up with strategies that will halt double digit inflationary regime, saying the trend is hitting hard on the Operational Expenditure (OPEX) of manufacturing firms.
The company also called on security agencies to work towards ending the incessant herders/farmers clashes which have forced many of the farmers supplying majority of its raw materials to dump farming for safety sake.
Industry analysts had earlier observed that manufacturers in the beer and beverages sector had in the last few years of herders/farmers clashes faced scarcity of key farm products including sorghums, maize, barley, millets and others, thus causing massive loss of forex in importing them.
Both factors have a hand in forcing brewing firms to experience challenging operating environment in the first quarter (Q1) 2019 which stemmed from the 2018 business year.
For example, according to Nigerien Brewery, in 2018 it incurred N25.8 billion as excise duty expenses.
In her remarks, the Corporate Affairs Director, Nigerian Breweries Plc, Sade Morgan, said if the herders/farmers clashes fades away, there are plans by the company to take its current 57 per cent local sourcing of its raw materials to 60 per cent or more considering the growing engagements of large scale farmers in parts of the north where the crisis seem more disturbing for now.
According to her, “We are also exploring the use of maize and rice as brewing adjuncts (sources of starch) in addition to what we have previously achieved with sorghum and cassava.
“This agenda enriches value creation among local business owners on the local sourcing value chain,” she said.
Morgan also restated the company’s commitment to enhance renewable energy, saying that NB in 2018 commenced the reuse of biogas generated from its effluent treatment plants for thermal heat generation in its boilers.
She said Nigerian Breweries remained committed to positively impacting the society through its corporate social responsibility, sustainability activities and empowering local farmers to boost their yields so that the ongoing backward integration in sourcing raw materials will be sustained.
