Nigerian Breweries Shuts Down Two Brewery Plants to Cut Costs

By Aduragbemi Omiyale

In a bid to “optimise our resources,” one of the leading beer makers in the country, Nigerian Breweries Plc, has temporarily shut down operations of two of its nine factories.

In a message over the weekend, the brewery giant said the costs cutting measure was the best decision to take at a period the country is facing economic challenges, which is affecting the purchasing power of consumers, especially when the strategy of raising prices of its products beyond the reach of its customers may backfire.

Recall that not too long ago, the company upwardly reviewed the prices of its products just like its peers in the food and drink segments of the economy.

In the note issued last week, Nigerian Breweries admitted that the suspension of operations at the two plants could result into cutting down its workforce.

However, to amicably resolve any labour issues that may arise from the action, the management has “invited the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB) to discussions on the implications of the proposed measures.”

“Our commitment to long term operations in Nigeria enabled by operational efficiency and financial stability is unwavering, as we aim to ensure the least possible impact on affected employees and maintain strong support for our communities,” the company assured.

It also disclosed plans to raise addition funds of up to N600 billion through a rights issue from the capital market so as to keep the business running efficiently.

“We are taking decisive steps to secure a resilient and sustainable future for our stakeholders through a comprehensive Business Recovery Plan.

“This plan includes a N600 billion rights issue, a company-wide reorganization with temporary suspension of operations at two of our nine breweries to optimize our resources in the other 7 breweries some of which recently received significant capital investment and ensure a return of the business to profitability,” it added.