The adoption of backward integration as the primary strategy for import substitution has helped Nigerian Breweries Plc. address the challenges of the operating environment and remain profitable in difficult times, the Managing Director of the company, Hans Essaadi, has said.
He spoke on the topic ‘Backward Integration and the Promotion of Made-in-Nigeria Goods’ at a panel during the ‘Employers Summit’ organised recently by the Nigeria Employers’ Consultative Association (NECA).
A statement by the Corporate Affairs Director, Nigerian Breweries, Sade Morgan, quoted Essaadi as saying that Nigerian Breweries Plc. had invested heavily over the years in Research and Development (R&D) in the sorghum value chain.
The statement, which was made available to The Nation, said such investment has delivered enormous gains, particularly with the local production of malted sorghum and malted syrup, replacing the imported high maltose syrup since 2019.
He said the company’s local cultivation of sorghum varieties had assisted a great deal in reducing the amount of foreign exchange expended on the import of sorghum which has impacted the cost of production for non-alcoholic and alcoholic products in the last few years.
Essaadi stated that the success story of the cultivation of sorghum varieties could be attributed to the level of support and collaboration between the research team and the farmers, adding that the investment has gone a long way to support livelihoods in the entire agricultural value chain.
“I am happy to inform you that we now use more sorghum varieties in our non-alcoholic drinks than in our beer. This aligns with our goal to boost our position as the proud number one Malt Beverages & Beyond Company in Nigeria and become a reference point in sustainability and responsibility,” he said.
The brewery giant’s boss called on the Federal Government to offer more incentives to investors in the agricultural sector, particularly players in the manufacturing industries, to enhance backward integration, promote locally-made goods, and invariably grow the country’s Gross Domestic Product (GDP).
He also urged policymakers to consider the creation of an excise discount policy to be tied to backward integration, particularly in agriculture, noting that the policy would robustly encourage backward integration.
Essaadi also noted that such policy was already in place in Sierra Leone, embedded in the country’s Finance Act 2019, and is now reaping the benefits of such incentivized investment in agriculture.