Guinness Nigeria Assures on Future Outlook, targets 75% local content

By 2018, three-quarters of materials and products from Guinness Nigeria Plc would be developed from Nigerian sources as the Nigerian subsidiary of Diageo Plc moves to deepen its Nigerian root and drive growths with Nigeria-based innovations and resources.

Guinness Nigeria was established in 1962 with Nigeria being the first country to have a Guinness brewery built outside of the British Isles. It remains one of the earliest listed companies on the Nigerian Stock Exchange (NSE).

 

At a pre-annual general meeting media briefing in Lagos, managing director, Guinness Nigeria Plc, Mr. Peter Ndegwa, said one of the priorities of the company is to increase its local content from the current 43 per cent to 75 per cent in the next three years. This will have multiplier effect of increased jobs and opportunities for Nigerian small and medium enterprises and suppliers.

He outlined that Guinness Nigeria was poised to strengthen and accelerate its premium core brand, support innovation as well as build and constantly extend route to consumers at the right price and right quality.

Ndegwa, who resumed as the chief executive last September, assured that as a global company, Guinness Nigerian will continue to do everything humanly possible to adhere to highest quality standards.

It would be recalled that National Agency for Food and Drug Administration and Control (NAFDAC) had few weeks ago slammed a N1 billion fine on Guinness Nigeria as “administrative charge” for alleged non-compliance with certain guidelines on raw materials revalidation and disposal.

Chairman, Guinness Nigeria, Chief Babatunde Savage, said the company was doing everything to ensure the issues with NAFDAC are resolved amicably.

He said while the circumstances that led to the imposition of the fine was regrettable, it was not a deliberate effort on the part of the company to flout extant rules and guidelines for quality control.

“As a global company we set store for the ideals of quality, which has earned us accolades from around the globe and even locally from our regulators, including NAFDAC. The material was not even found inside our factory. It was from one our hired warehouses. The raw materials had not even gone through our brewery process. This is just a one-off thing that would be resolved amicably,” Savage said.

He noted that the company has enjoyed a very cordial relationship with the regulator overtime and was desirous of maintaining that in the future ahead.

“As a law abiding corporate citizen we’re convinced this matter will be resolved and further strengthen our bond with the regulator,” Savage said.

He said board of directors has approved N3.50 dividend per share, totaling N4.82 billion, which represents 62 per cent of distributable profit for the year, adding that the dividend would be paid as soon as it is ratified by the shareholders at the annual general meeting scheduled for Abuja tomorrow.

While giving performance highlight of the company, Ndegwa said in the period under review, sales continued to grow despite a challenging trading environment, being three per cent ahead of the same quarter last year.

He noted that despite the sales growth, gross profit declined by 12 per cent due to the impact of exchange rate devaluation, inflation, an increased share of value brands, together with the phasing of costs.

Marketing, distribution, administrative and other expenses at N8 billion were two per cent ahead of the prior year. Reported operating profit at N1.4 billion is 50 per cent below the previous year but is significantly impacted by the phasing of costs which is expected to reverse during the rest of the year,” Ndegwa said.