Nigerian Breweries Plc, a prominent player in the nation’s beer market, has announced the temporary cessation of two out of its nine production facilities in an effort to streamline operations and manage resources more effectively.
The company communicated over the weekend that this cost-reduction step is crucial during a time when economic challenges are impacting consumer spending power.
This is particularly pertinent given the potential risks associated with increasing product prices, which could alienate customers.
The brewery had previously increased its product prices, following a similar trend in the food and beverage industry.
Last week’s announcement acknowledged that halting operations at the two factories might lead to workforce reductions.
To address any potential labor disputes, Nigerian Breweries has engaged in dialogue with the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), discussing the repercussions of the planned actions.
The company reaffirmed its dedication to sustained operations in Nigeria, emphasizing its commitment to operational efficiency and financial health, with the goal of minimizing the impact on employees and continuing to support local communities.
Furthermore, Nigerian Breweries revealed intentions to secure additional capital up to N600 billion through a rights issue in the capital market, ensuring the ongoing efficiency of the business operations.
“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.
