Nigerian Breweries Plc has revealed of its plans to increase the local content through cassava benefits by 60 per cent before 2020.
The Managing Director, Nicolaas Vervelde mad this pledge in Lagos recently while taking stock of the company’s performance in the 2016 financial year.
Vervelde who spoke at a pre-yearly general meeting with explained that the company intends to take advantage of an existing Memoradum of Understanding (MoU) with the Federal Ministry of Agriculture and Rural Development (FMARD), adding that plans are underway to harness the benefits of cassava.
He added: “We have about 50,000 farmers that have indirect employment due to our involvement in the sorghum value chain and 200,000 farmers make use of our farm. Two or three years ago, we also got involved in cassava value chain where we worked with Dutch government trying to improve the entrepreneurship in Africa. We indirectly employ up to 3,000 farmers. Every year we see increase and we hope to improve this programme and move it to the east of the country.
According to Vervelde, the company has successfully tracked energy consumption, reduce waste and improve on efficiency in all departments.
The NB Plc boss who spoke on sundry issues said: “It is anticipated that economic activities will improve in 2017 considering the far reaching fiscal and monetary measures being planned and implemented by the Federal Government. It is therefore hoped that with the gradual rise in the price of oil and a steady increase in the volume of oil output, the Naira will be strengthened and forex will be more available for businesses.”
For its first quarter performance, the company had declared a profit after tax of N11. 44 b, indicating nine per cent increase over the N10.45 billion recorded in the same period in 2016.
Also, the company recorded revenue of N91.29 billion for the period, signifying an 18 per cent increase over the N77.55 billion achieved in 2016.
Also, the cost of goods sold increased by 25 per cent as a result of higher input costs while results from operating activities and profit after tax grew by seven per cent and nine per cent respectively, impacted by lower net finance charges and a continued focus on its cost efficiencies.
Revenue for the period grew by 18 per cent due to the impact of price increases implemented in 2016 to cushion the effects of the operating environment.
On how forex sourcing has affected the operation of the company, he said: “What is important is that when you look at forex input, it is not only about what is imported; it is also about suppliers locally. Take labours for example. For Nigerian Breweries, all of our labours are got locally. For us, this is not forex related. We pay our suppliers in naira. There is also indirect impact on our cost. Devaluation last year has direct impact on us.
“Consumers purchasing power is already under pressure and there is negative effect in terms of volume. We are prudent in thinking about price increase. Also, what we saw in 2016 when there was devaluation of 40% of the naira in official terms and parallel rates that shoot up to over N500 per dollar and inflation that went from nine to 18% is a sign that there is pressure. Therefore we cannot afford price increase.”