Tag: Nigerian Breweries

Nigeria’s foremost brewing company, Nigerian Breweries Plc, has officially completed the acquisition of a majority stake of 80 per cent in Distell Wines and Spirits Nigeria Limited (Distell Nigeria).

The completion of the transaction follows the approval of the South Africa Reserve Bank (SARB) for the acquisition by Nigerian Breweries Plc, of the shares of the South African entity, Distell International Limited (now known as Heineken Beverages Holdings Limited) in Distell Nigeria, as well as the import business of Distell International Limited in Nigeria.

Managing Director, Nigerian Breweries Plc, Hans Essaadi, said the acquisition and subsequent commencement of business operations align with the strategic objective of the brewery company to expand its current product offerings beyond beer to include wines, spirits, and flavored alcoholic beverages.

Essaadi, noting that the company remains unwavering in its commitment to cater to the diverse needs of consumers, said “This acquisition is part of efforts to provide access to a complementary multi-category portfolio of fast-growing brands of wines and spirits market segment and capture significant growth opportunities in the wines and spirits segment of the brewing industry. We are excited to have the process completed and can’t wait to see how this transforms our business”.

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In his remarks, the Managing Director, Distell Nigeria, Mr. Steve Ighorimoto, stated that the acquisition is an exciting new chapter for the company as it would help increase the capacity necessary to achieve improved business performance.

“We are excited to be a part of Nigerian Breweries, as we share in the solid track record of growth, including a highly engaged, dynamic, experienced, and diverse team. These changes will strengthen the organization’s manufacturing, marketing, and distribution capabilities while ensuring sustainable growth and maximum value creation for all stakeholders,” he said.

Distell Nigeria is involved in the local production of wines and ciders under license from Heineken Beverages. With the acquisition, Nigerian Breweries will have access to both the local production and the importation of wines, spirits, and flavoured alcoholic beverages brands from South Africa, including Amarula Crèam Liquor, Nederburg, Drostdy-Hof, 4th Street, Bain’s Whiskey, Knight Whiskey, Scottish Leader Whiskey, Chamdor wine ranges, Hunters, and Savanna.

• Expands to wine, spirit brands

Nigerian Breweries has vowed to remain consumer focused despite the economic headwinds which saw the brewery giant recording some upsets in its financials in the year end results.

Speaking during the company’s 2023 pre 78th AGM media briefing in Lagos, Mr. Hans Essaadi,  the company’s Managing Director/ CEO disclosed that the company recorded a net loss of approximately N106 billion in its 2023 full year results.

The loss follows a combination of challenging economic factors ranging from heightened operational costs, continued pressure on consumer disposable income, escalating inflation rates, FX volatility, and high cost of debts, amongst others.

He explained that the industry was initially confronted with a massive increase in excise duty rates and introduction of other taxes on alcoholic beverages and single use plastics.

“Following appeals and representations by the industry, the government suspended the implementation of the new rates and taxes. Nevertheless, the brewed product market was severely impacted by the economic realities of 2023 which included huge input and operating costs and consumers’ weak purchasing power,” regretted Mr. Essaad.

According to him, the market suffered a volume decline and the erosion of profitability leading to unprecedented combined pre-tax loss of N266 billion amongst the main players adding that, “the revaluation of outstanding foreign debts and payables to overseas partners due to the devaluation of Naira was the main reason for the huge loss recorded.

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Essaadi regretted that despite the company’s best efforts and diligent management which ensured that it ended the year with an operating profit of N45 billion, the Brewery still ended with a net loss.

Based on this, he said the board was unable to propose any dividend payment for the 2023 financial year breaking the age-long tradition of consistent dividend payment.

Echoing similar sentiments, the Company’s Marketing Director, Emmanuel Oriakhi said the final part of the transaction for the completion of the 80 per cent acquisition of Distell Wines and Spirit Nigeria Limited will be completed in the first half of the year which will be between April and June this year.

He explained that following the shareholders’ approval at the extra-ordinary general meeting in December last year, the company has subsequently executed the transaction documents with Heineken Beverages[Holdings] Limited of South Africa for the acquisition of an 80% equity stake in Distell Wines and Spirits Nigeria and the acquisition of 100% of Heineken Beverages’ import business in Nigeria.

“This is a strategic acquisition that is in furtherance of our beyond beer agenda and which would provide us with a complimentary multi-category portfolio and strengthen our market share in the wider beverages market,” he said.

• To raise fresh N600b capital, may downsize

In what insiders have described as a total overhaul of operations, the nation’s brewery giant, Nigerian Breweries has hinted of plans to carry out company-wide reorganisation as part of strategic recovery plan, The Nation has learnt.

This follows the recent announcement of its Business Recovery Plan, aimed at securing a resilient and sustainable future for its stakeholders.

Inside sources said, 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.

Thus in accordance with labour requirements, the Company invited the Unions to discussions on the implications of the proposed measures.

It may be recall that the company recently notified the Nigerian Exchange Group (NGX) of its plan to raise capital of up to ₦600 billion 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.

Read Also: Nigerian Breweries to raise N600b new equity from shareholders

“We recognise 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 seven 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.

Managing Director/Chief Executive Officer (CEO) of Nigerian Breweries Plc, Hans Essaadi, has expressed optimism about better days ahead having weathered the storm of last year.

Speaking yesterday in Lagos at Nigerian Breweries Distributors Awards and unveiling of the latest addition to its teeming portfolio – ‘Legend Twist,’ he said what the company achieved last year was remarkable, adding that company weathered the storm.

He said: “I am proud of what we have all achieved. Now more competitive than ever,” he said adding that the company was shaken in 2023. He paid tribute to Nigeria and wish them success this year.’’

Also, NB’s Sales Director, Ayo Lawal, said cash crunch, galloping diesel cost and election of 2023 posed daunting challenges to the company’s survival, adding that the company showed resilience.

According to him, the challenges of last year made the company to innovate and explore new ways for happiness and profitability. He said this year is not going to” be easy but we have learnt to move; we learnt how to survive in 2023.”

The ‘Legend Twist’, the company said, is an innovative addition that stands as a testament to the company’s commitment to brewing excellence and an acute awareness of the evolving tastes of the modern consumer.

Crafted with the intention to differentiate within the stout category and cater to the growing demand for premium and diverse taste repertoires, Legend Twist is poised to captivate the hearts and palates of consumers. With a lower ABV, non-bitter profile, and a stylish presentation in sleek 33cl cans and 33cl RGB bottles, Legend Twist introduces a delightful fusion of fruity flavors – pineapple, lemon, and ginger. It’s a bold departure from the traditional stout experience, unlocking new dimensions of taste and style.

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Ita Bassey, Portfolio Manager, Dark Beer, Nigerian Breweries PLC, said: “In crafting Legend Twist, we wanted to offer consumers more than just a beverage; we aimed to deliver a transformative experience. This brand is a testament to our commitment to innovation and satisfying the diverse tastes of our consumers. ‘Legend Twist’ is not just a drink; it’s an ode to those who crave something extraordinary. Legend Twist encapsulates the spirit of exploration, daring consumers to enter a world where flavours intertwine, creating a resonant experience.”

Legend Twist is an innovative fusion of rich stout with vibrant fruity flavours is specially brewed for consumers seeking an extra layer of enjoyment in their beverage choices or looking to reduce their consumption of alcohol.

To herald the arrival of Legend Twist, a captivating campaign is set in motion. With the tagline “From one legend to another, now with a twist,” the campaign encapsulates the spirit of the brand and the transformative experience that Legend Twist offers. With an engaging TV commercial, dynamic digital promotions, and enticing in-store activities, the campaign aims to resonate with consumers nationwide. Follow @legendnigeria on social media and use the #EmbraceYourTwist for more information and updates.