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Tag: MARKET

  • Sustaining market growth with beer festival

    Sustaining market growth with beer festival

    In terms of sales, the beer market is one of the biggest in the world. With plans to sustain the growth, despite market volatility, the industry is set to witness the first global beer festival next year, which could impact on other sectors of the economy, writes ADEDEJI ADEMIGBUJI.

    Next year, it will be about beer marketing. In a market still inundated by volatility, brewers have been able to get out of recession by recording positive growth like the telecoms sector, which is insulated from the hues and cries of the economic crisis.

    However, to retain the trend and act as a buffer to the economic downturn, the industry is set to witness Africa’s biggest beer festival, where brewers will forget about competition, demarketing, and that make them stiff competitors and collaborate to make a success of the event.

    Setting the greviances behind them is necessary, especially when no one knows what next year holds in stock. For some, the outgoing year was bad -little ads, low sales and the difficulty to match competing brands as a result of macro and micro-economic harsh realities.

    According to a report by United States (US) marketing intelligence, A Medium, consumption pattern of beer consumers changed during the year with many switching to affordable alternatives, leaving premium brands in the lurch.

    While the gainers of the new trend are the low-value beer brands, the premium brands bled from the economic squeeze. The major factors that drove the change in beer consumption are rising cost of living and consumers’ decrease in purchasing power  driven by the economic recession which  had an industry-wide impact on the beer market.

    The latest financial results from the two major brewers in the country indicated a general lull in the brewery industry. Guinness Nigeria Q3 2015/2016 financial results showed a 33 per cent decline in Profit Before Tax (PBT) from N29.5 billion in the previous period to N19.8 billion. Similarly, Nigerian Breweries Q2 2016 result showed a 36 per cent decline in its profit before tax (PBT) to N10.5 billion, an indication that the company would miss its N56.8 billion PBT forecast for 2016.

    With a tight budget and limited logistics, the smaller brewers were forced to play at regional markets to survive. For instance, Old Consolidated and International Breweries, played in the Southwest and Champion Breweries in the Southsouth, before they were acquired by the industry’s big boys.

    However, the entrance of the South African brewer, Sabmiller in 2012 with its value-for-money beer offerings; Hero Lager and Castle Milk Stout, changed the topography of the market and upstaged the competition.

    While NB responded to the Sabmiller challenge and in so doing repositioned to maintain its leading position in the lager beer market with the acquisition of small-time brewers, Guinness has been slow in reacting to the change, a development market watchers blamed for its declining fortunes in recent years. Bar and hotel owners confirmed the lull in sales of premium beers.

    As a result, there are concerted plans by some key players in the industry to align the market with global trend. One way to get out of the recession, which is likely to continue next year, is a plan to stage Nigeria’s first beer festival in Lagos.

    Despite that the beer market is the biggest in Africa, it shocked global players that it has not held any global beer festival. Investigation has shown that Beer Festivals around the world have grown to become major tourism events, with countries, such as Germany attracting well over 50,000 tourists to its yearly “oktoberfest” beer festival. Other  countries are Czech Republic, Canada, Durham, Columbia, Britain and Belgium, among others.

    “The Nigeria Beer Festival will be a week-long carnival-like funfair, combining entertainment, sales and marketing, with the idea to gather the largest community of beer consumers from across the country and beyond, resulting in economic value for the brands and the economy.

    “Each of the participating brands has the opportunity to own particular days during the week to entertain the teeming visitors at the festival.Various beer brands will be available for tasting and purchasing in a carnival-like atmosphere,” one of the organisers who pleaded anonymity told The Nation.

    While the aim of the festival is to build brand engagement for beer brands, it is also expected to boost other sectors, such as entertainment, food, tourism and the fashion industry.

    An industry analyst, Dr. Ken Olakunle, who manages BrandSpeak Africa, the festival is projected to pump over N100 billion within a week into the economy as other global brands not present in market, are also expected to use the festival as a window for entry into the  market.

    During the festival, a select top artistes will perform daily. Fashion show, music concerts, fireworks’display, carnival, lifestyle, barbeque, asun, and beer will beautify the atmosphere at the Tafawa Balewa Square, Lagos, the proposed venue. Notably, the festival will serve as an umbrella for other sectors to display their products and services which will attract business networking.

    To achieve first-class standards, the festival organisers with reputable and qualified architects in Poland and Spain, have designed a modula stand to fit into any shape or style desired by exhibitors.

    But why a beer festival? The organisers said Nigeria has the largest population in Africa, a growing middle class and a large number of  consumers continue to emerge. Again, Nigeria is the second largest alcohol market in Africa, with an expected total of 15.2m hectolitres per year.

    “So, drinking alcohol is a social activity in Nigeria, as 80 per cent of the country’s alcohol sales are on-trade. Beer is the most popular alcoholic drink in the country, making up the larger percentage of all alcohol sales. Therefore, this event will be an organised platform to showcase and market the various beer brands and other alcoholic drinks in Nigeria with reference to business, lifestyle, culture, tradition and social economic benefits in a carnival-like atmosphere. The organisers also make bold to say that this festival is for adults who are advised to drink reasonably, saying further that beer festival will not admit persons below 18 years,” said Olakunle.

    A Lagos-based Public Relations (PR) Consultant, Mrs. Hastrup Cole-Denrinmade, said a festival has fast grown to become major tourism event across the globe with countries, such as Germany attracting well over 50,000 tourists, adding its being hosted in Lagos means that over 50,000 tourists are expected to come to Nigeria to boost the economy yearning for growth.

    “To my knowledge, the beer festival will partner the Federal Ministry of Culture and Tourism to drive this noble idea. It will hold in Lagos, the headquarters of all the major beer brands, and touted as the entertainment hub of Nigeria and by extention, Africa,” she said.

    Meanwhile, a new report by Canadean Market Report, expects more Africans to enter the beer market from the home brew sector, while commercial beer and premium brands forge ahead in the exploding African beer market.

    According to the report, the African beer market is the fastest growing global beer market with a yearly average growth rate of five percent between 2013 and next year. This means the African beer market growth will beat that of Asia and Latin America, projected to witness a growth rate of four percent and three percent. South Africa is the biggest market in Africa, with an expected total volume of 30,921th hectolitre (hl) in 2014, followed by Nigeria with 15,200th hl and Angola with 12,790th hl.

    Account Director, Canadean Market Report, Kevin Baker, said: “Africa has seen inflation fall, foreign debt shrink and GDP rise in the last few years. Moreover, population growth – once feared as a major contributor to poverty – is now perceived as an asset, with the working age population set to outgrow that of China and India.”

     

    Beer Growth Rates

    Canadean survey found that more African consumers will change their home brewed drinks for commercially brewed ones over the coming years.

    “At the moment, homemade alcohol products still dominate theAfrican market, but they pose a significant health risk. This is an incentive for consumers to move away from ‘home brews’and instead turn to commercial beer,” says Baker.

     

    Protecting under-age from the beer festival

    According to Cole-Denrinmade, the festival will not allow an under-age. “In fact, there are mechanisms that will be used to check this and the event will also be used to preach responsible drinking among adults,” she said.

     

    How beer can contribute to economy

    The beer industry is a large segment of the food and beverages sub-sector. It constitutes the non-oil sector where Nigeria is leveraging on to drive her economic diversification programme.

    Having evolved from bottling to a diversified industry involved in the production of canned drinks and the use of tetra pack, the sector accounted for 35.9 per cent of the growth in the industrial sector, which grew in 2014 by 6.41 per cent as against 0.87 per cent in 2013.

    NB PLC has the largest coverage, with about eight breweries located across the country and estimated yearly capacity of 13.5 million hectoliters (mn hl).

    Guinness operates four breweries with a total yearly capacity of 7.5mn hl by 2014. SABM has built up its capacity (by acquisition) to about 1.8mn hl, which includes Pabod Breweries in Port Harcourt, International Breweries in Ilesa and Onitsha.

    Experts say the beer sector is very well positioned to galvanise the economy through industrialisation. Brewery companies, whose principal activities include the production, packaging and sales of alcoholic and malt beverages, employ close to one million people.

    They also have about 50,000 distribution outlets in the country made up of wholesalers, hotels and clubs. For instance, NBs’operations alone support indirectly 586,000 jobs, which represent 0.64 per cent of the total work force, of which 54,000 are within its Sorghum Value Chain.

    The company’s operations also have a value added impact of N243 billion on the economy, which represents 0.65 per cent of the nation’s GDP. The beer industry is also a significant driver of tax revenues. In 2011 alone, N87 billion was paid as taxes by NB. This represented 4.02 per cent of the country’s non-oil revenue.

     

  • Market wall collapses in Akwa Ibom, kills two

    Market wall collapses in Akwa Ibom, kills two

    The wall of a popular market in ‎Urua Ederebo, Ikot Akpatek, Onna Local Government Area, Akwa Ibom State, on Monday collapsed killing two market women while 17 others sustained different degrees of injuries.
    Onna is hometown of Akwa Ibom State Governor Udom Emmanuel.
    An eyewitness report indicates that injured victims were moved to Immanuel General Hospital, Eket for medical attention, while the ‎two casualties were immediately evacuated from the area.
    The eyewitness, who pleaded anonymity, narrated how some of the victims considered to have been dead during the incident were however ‎resuscitated on arrival at the hospital
    According to findings by The Nation, ‎Urua Ederebo market is 60 year old and was renovated three years ago‎ by the state government.
    The Akwa Ibom Works Commissioner, Ephraim Inyang-eyen, who led an emergency rescue team to the scene of the incident said no life was lost during the incident.
    It was also learnt that Mr. Inyang-eyen immediately evacuated the casualties and the injured.
    Reacting to the incident, the State Commissioner of Police, Murtala Mani, ‎confirmed that two women died to the collapsed market wall.
    He said: “It is not a building that collapsed. It was the wall of a local market. The market is a small market. Two market women died.”
    The collapse of the market wall is coming exactly nine days after a church building belonging to Reigners Bible International collapsed and killed 26 worshippers and injured hundreds.

  • Ibadan Market inferno consumes property worth over N10m

    An early morning fire outbreak on Sunday razed some parts of Araromi Market at Agodi Gate, Ibadan, where used tyres and motor parts worth over N10 million were destroyed.

    Mr Abdul Azeez Ojo, Chairman of the market, told the News Agency of Nigeria (NAN) that the inferno began at about 5.30 a.m.

    According to him, the Fire Service was alerted and they responded promptly.

    Ojo, however, said a sizeable number of shops equipped with tyres and other goods were razed before the arrival of the fire fighters at about 6 a.m.

    “The Fire Service were able to put out the fire to avert more destruction, nevertheless, shop owners still suffered losses worth over N10 million.

    “The most pathetic thing is that these burnt shops were owned by young traders who have just started business and we appealed to the state government to assist them,’’ he said.

    Two victims of the incident, Hassan Olanrewaju and Michael Ajayi, whose shops were razed lamented the ugly incident.

    They pleaded with the state government and other well-meaning Nigerians to assist them financially to enable them go back to business.

    Mr Adeleke Isiaka, the Fire Service team commander, said his team arrived at the scene promptly when they received the call, adding the response time was impressive.

    Isiaka said his team was able to put out the fire on time due to the cooperation received from the traders and sympathisers.

    “The cause of the incident is yet to be ascertained, but it is possible that careless handling of cigarette butts may be responsible.

    “I am saying this because there was no electricity light, nor any sign of cooking in the market at the time of the incident,’’ Isiaka said.

    NAN further reports that men of the Nigeria Police and Nigeria Security and Civil Defence Corps (NSCDC) were on ground to prevent looting of shops by people with such motive.

    Mr Moshhod Adeyemo, the team leader of the NSCDC told NAN that his men arrived at the scene at exactly 6 a.m. to secure the area.

    He said the operation was quite successful, saying no life was lost. (NAN)

  • Three die in Borno market suicide bombing

    Three die in Borno market suicide bombing

    Three people, including the two suicide bombers,  died yesterday in an attack at the Maiduguri Monday Market. Eighteen others were injured.

    Borno State Governor Kashim Shettima summoned an emergency security meeting following the “unfortunate incident”, which happened two days after the explosion in Magadali, Adamawa State in which about 60 people were believed to have died.

    The injured were evacuated to the Maiduguri Specialist Hospital

    Abba Jato, an attendant at one of the filling stations at Post Office, Maiduguri, said the sound of the explosion shook every building in the area.

    “We heard a loud bang and all buildings shook to foundation but because we are used to this kind of things, I knew it was a bomb blast,” he said.

    Shettima summoned officials of all markets, motor parks, shopping complexes, football fields and other places of public gatherings in Maiduguri to an emergency security meeting with heads of security agencies and the civilian Joint Task Force (JTF). The meeting will hold today at the Government House.

    The governor visited the scene of the suicide attacks around the market and was at the accident and emergency ward of the Maiduguri Specialist Hospital to console the injured.

    Three of the injured were undergoing emergency surgery at the time of the governor’s visit.

    The suicide attacks were carried out by two women in two close spots, both outside the Maiduguri Monday market before 10am, Commissioner of Police Damien Chukwu who received Shettima at the scene said.

    The CP said one person died; 18 were injured.

    “Tomorrow, we will be having an emergency security meeting involving management of all the markets, motor parks, shopping centres, football fields and other attack prone areas and the we will invite the Civilian JTF and, of course, our security officials so that we cross pollinate ideas and come up with some new measures that will strengthen our existing security structure around markets. We have been taking different steps as the insurgents change their ways, we will all meet and come with measures that will not be made public.

    “This suicide attack is highly unfortunate; I condole with the families of the victims. We will always do the best we can to prevent this kind of bloodbath” Shettima said.

  • Naira remains stable at interbank market

    Naira remains stable at interbank market

    The Naira on Monday remained stable at the interbank market, closing at N305.25 to a dollar.

    The News Agency of Nigeria (NAN) reports that the naira maintained its Friday rate against the greenback.

    At the Bureau De Change (BDC) window, the naira traded at N400 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro closed at N585 and N506, respectively.

    The naira also maintained its Friday rate of N473 to a dollar at the parallel market, while the Pound Sterling and the Euro sold at N585 and N505 respectively.

    Traders at the market blamed dollar scarcity for the woes of the naira.

    Since the launch of the flexible exchange rate policy, the naira has continued to struggle for survival, leading experts to interrogate the philosophy guiding the policy.

    However, stakeholders have not lost hope in the capacity of Diaspora remittances to change the fortunes of the naira as the Yuletide approaches.

  • ‘Africa is world’s most attractive equity market’

    Africa  is still one of the world’s most attractive markets for private equity, Boston Consulting Group (BCG) has said.

    The Financial Group, in a statement signed by Associate Director and a co-author of the report, Marc Becker,  said Africa remains one of the world’s growth opportunities for private equity investors, though with some facing serious challenges of recent.

    To generate the high returns that investors expect, however, funds should consider more flexible investment strategies and new types of corporate targets, the report stated.

    The report, titled: Why Africa Remains Ripe for Private Equity, notes that since the early 1990s, the number of private equity funds active in Africa has swelled from about a dozen to more than 200, while funds under management have risen from some $1 billion to upwards of $30 billion. This rapid growth, combined with the recent downturn in Africa’s largest economies, has raised concerns among some analysts that a bubble is emerging, the statement said.

    The report said most private equity funds and principal investors tend to invest only in minority stakes, with the goal of better managing their risks by leveraging robust local partners. While they overwhelmingly focus on a limited pool of investment targets: profitable companies with annual revenue of more than $100 million and proven track records.

    The report advised that alternative investment approaches are particularly important if funds are to meet the rising expectations of their investors. It said: “Increasingly, development finance institutions are being joined by global institutional investors that are far more focused on high returns. As prices for stakes in large African companies rise, it will become more difficult for private equity funds to deliver high returns. To fully capture the opportunities in Africa and earn high returns, private equity funds must adapt to the rapidly evolving market and consider more flexible investment strategies.”

    The report recommended that private equity investors consider other investment approaches, such as majority stakes, strategic partnerships, and evergreen funds, rather than only funds with timing constraints for divestiture. It also suggested that funds look at a wider range of targets, such as Africa’s growing pool of dynamic smaller companies with significant growth potential.

    “Too many private equity investors are pursuing the same kind of target with the same kind of deal structure,” said Patrick Dupoux, a BCG Senior Partner and a co-author of the report who leads the firm’s activities in North Africa.

    He added: “But look beyond the narrow cohort of Africa’s corporate elite and you’ll see that the continent offers real opportunities. Some of the most promising targets in Africa are companies that are still off the radar of most funds.”

    On their optimism, he stated that despite the rapid growth in funds and a crash in global commodity prices that has hit a number of African economies, the following factors support a positive outlook for private equity.The factors he itemised is that the amount of private equity and principal investment capital under management in sub-Saharan Africa remains very low relative to world standards with a mere 0.1 per cent of GDP. That compares with approximately 1 per cent of GDP in western countries.

    Others are that despite recent setbacks, most economists expect that GDP growth in Africa will rebound over the medium term, driven by a swelling middle class, rising foreign investment in infrastructure, and a growing skilled labor force. The statement also hinted that the pool of investment targets is growing with nearly 11,000 African companies having revenue of $10million to $100million and assets of $20 million to $200million yearly.

  • Africa’s clipper’s market worth €200m

    The clipper market in Africa has been valued at about €200 million with Nigeria accounting for a major share of it, selling 3.5 million units, said Philips Africa.

    This figure emerged at the launch of Philips Africa brand of clippers for the African market in Nigeria.

    During the launch at Protea Hotel, Ikeja, Lagos, the company said the new clipper was launched after a four-year research in several markets across sub-Sahara Africa.

    It added that the new Philips African clippers were designed to offer a more effective and precise haircut without the risk of cuts, rashes or bumps.

    “The Philips clipper was developed and extensively field tested, taking into account the core concerns that came out in the research- mainly the need to get that clean shave feeling, but to avoid the scratches, cuts and bumps that sometimes develop on the skin,” General Manager, Philips Personal Health, West Africa, Chioma Iwuchukwu-Nweke, said.

    The two clippers launched by Philips are Philips Clipper Pro,  ideal for professional barber styling and Philips Clipper Home, designed for personal use. Both products have been launched into the premium category of the clipper segment and would be contending with other market leaders.

    “Yes, there is load of competition out there. But we intend to beat competition. We have spent lots of time on research, finding out what the market wants. We know the market wants more, that is why we produced the Philips clipper.

    “Some clippers out there will give you the perfect precision, but  they cut the skin. Some are gentle on the skin but don’t give precision. But Philips is offering the best of both worlds. That is why we say ‘cut your hair and not your skin,” Nweke said.

  • Council chair decries Utako Market rot

    The Chairman, Abuja Municipal Area Council (AMAC), Hon Abdullahi Adamu Candido has bemoaned the deplorable state of Utako ultra-modern Market.

    He said the market is generally in a poor state, and “this is not the intention of the initiator of this concept, so we must come back to the real intention of the market.”

    To this end, the AMAC chairman urged the management of the market, the unified managers in the market and associations of the traders to do all it could to fix the market within the next three months.

    Speaking while leading top AMAC officials on an unscheduled inspection of the market, Candido lamented that the market had become very dirty and unorganised, which the council  can’t tolerate any longer.

    He said, “From the findings by the management committee we set up for the market, our assessment has not changed, as the market is still in its deplorable state.

    “Therefore, we have decided that we cannot continue to allow this market initiated with good intention to go the other way round, so we have to ensure that there is proper measures will be put in place, in order to bring back the lost glory of the market.

    “Also, you are hereby urged to ensure that all the identified makeshift shops put in place in the market through fraudulent acts, should be done away with. Get us the payment tellers, and let’s see whose account got money from the concerned traders; and their money must be refunded back to them.

    “Because it was a fraud, and whoever was behind the erection of makeshift shops will be prosecuted, irrespective of status or position, in as much as we have discovered that it was fraud, as it was never designed and approved by the council. We will never allow our traders to be shortchanged.”

    He continued, saying, “I will hand over the market to the standing committee on market of the Legislative arm, because they make the laws, which we abide by. The elected councilors will be working in synergy with the Council Market Management Committee, to tidy up and standardise the market.”

  • N5b capital market development fund coming

    N5b capital market development fund coming

    The Securities and Exchange  Commission (SEC) is planning a N5 billion Capital Market Development Fund (NCMDF) to promote infrastructural development of the capital market.

    A source said the regulator would provide the cash to demonstrate its commitment to the special fund.

    Earlier, SEC provided N5 billion initial capital for the Nigerian Investor Protection Fund (NIPF).

    The source said the NCMDF was conceived as a trustfund to enhance the development of the market.

    The source added that the proposal for the NCMDF to take custody of statute-barred and unclaimed dividends of 12 years and above was part of efforts to ensure that the seemingly “free funds” were put to the collective use of the market to enhance future returns to investors, adding that the NCMDF will be managed by a board and an  independent fund manager without interference from SEC.

    SEC had last week launched the plan for NCMDF. In a circular  to capital market stakeholders, the regulator called for a consideration of a new rule that will set up the NCMDF, which will take custody of all unclaimed dividends that are 12 years old and above. SEC estimates unclaimed dividends to be about N80 billion, with nearly half of the money unclaimed for  years.

    Under the laws, unclaimed dividends will remain available for collection by beneficiaries up till 12 years when they become statute-barred and are returned to the companies that paid them. The  rule seeks to change the return of the unclaimed dividends to companies that issued the dividends.

    According to SEC’s proposed “rule on application of 12 years and above unclaimed dividends”, companies and registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this rule transfer such monies into the Nigerian Capital Market Development Fund (NCMDF).

    “All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule. Companies shall disclose details of compliance with this Rule in their annual reports,” SEC stated.

    Major retail shareholders’ groups have risen against the plan to return statute-barred unclaimed dividends to NCMDF, describing it as a ploy to divert private funds into the control of the regulator.

    Shareholders’leaders across the groups said they would resist the transfer of statute-barred unclaimed dividends to any NCMDF, describing the plan as a wrong move and a volte face from the recent campaign by SEC for the removal of the 12-year limit to enable shareholders and their beneficiaries collect their dividends at any time.

    Independent Shareholders Association of Nigeria (ISAN) National Coordinator, Sir Sunny Nwosu, said his group would mobilise shareholders to resist what he described as “very offensive” attempt to take their private monies.

    Shareholders’ activist and  Nigeria Shareholders Solidarity Association (NSSA) Co-founder, Alhaji Gbadebo Olatokunbo, said the plan would lead to corruption and discourage investors from the domestic market.

    Constance Shareholders Association of Nigeria Coordinator, Mallam Shehu Mikhail, said the rule on return of statute–barred dividends to companies should be retained.

    He criticised the plan by SEC for lack of details on benefits of such initiative to shareholders and the quoted companies.

    However, the Association for the Advancement of Rights of Nigerian Shareholders (AARNS) President, Dr. Faruk Umar, described the plan by SEC as a healthy development, noting that the trustfund would discourage sharp practices around the unclaimed dividends.

  • Nigeria to host $54tr global pension market

    Nigeria is set to host the global pension market estimated to have hit $54trillion.

    Tagged World Pension Summit ‘Africa Special’, it is scheduled for between September 27 and 28 at the Transcorp Hilton Hotel, Abuja.

    The host, the National Pension Commission (PenCom), yesterday at the  pre-event, briefing said efficient regulation of pension in Nigeria has enabled the generation of a pool of long term funds of N5.73 trillion as at the end of last June.

    PenCom Director-General, MrsChineloAnohu-Amazu said the theme of this year’s summit is titled: Pension innovations: The African perspective.

    She said the theme had been carefully chosen as the commission seek to drive into greater prominence, the revolutionary strides and achievements of African governments in pension system.

    According to her, the global summit is one of the world’s premier league platforms for pension professionals that provides top-level environment for the exchange of business insights on essential “crossroads” in pensions.

    She added that yearly, over 500 experts from more than 45 countries participate and debate relevant innovations on retirement issues.