By Providence Emmanuel
NIGERIA Breweries (NB) Plc is set to achieve 60 percent local content in its raw materials sourcing by 2020 in line with federal government’s backward integration policy.
Speaking at a pre-annual general meeting media briefing in Lagos, Managing Director/Chief Executive Officer, NB, Mr. Nicolaas Vervelde, said that about 50 percent of the company’s raw material are sourced locally, adding that packaging cost in terms of cans, bottles, crowns, among others have either been reduced or are almost 100 percent locally sourced.
Also he said that the company, in conjunction with Heineken Supply Chain B.V. of the Netherlands and other Heineken companies, is involved in activities aimed at development of new hybrid sorghum varieties with the potential of increasing the yield/output for sorghum farmers as well as improving the quality of malt, which is a major raw material in its operations.
He added that the company has entered into supply agreements with local cassava starch processors whose activities have impacted positively on the communities where they operate.
Vervelde said, “If I look at packaging cost, almost everything is locally sourced, our cans, bottles, crowns, labour and others, close to 100 percent,. Only a few small things that we import, but it is relatively not very impactful and that is with regards to packaging materials. With regards to raw materials, we are close to sourcing 50 percent of all our raw materials locally, it is a very high percentage, but despite that, we are still not satisfied with that level. We want to have it by 2020 at 60 percent, we still hope that with all the activities we have to undertake, that we get to 60 percent before 2020.
“For several years, we have talked about the sorghum value chain, we use a lot of sorghum in our raw material, part of it is raw sorghum and part of it is malta sorghum. We have two sorghum malt plants, one in Kaduna and another in Aba, the biggest sorghum malt plant in Africa. We have been investing in research and development in the recent years.”
On product price increase, he said: “Going forward, we will balance the negative effect that price increases can have on the volume and on the consumer’s purchasing power through the speed and the impact of cost increases due to input prices, official and parallel exchange rate and inflation.”