LAGOS – The Managing Director/CEO of Guinness Nigeria Plc, Mr John Musunga, has stated that the foremost total beverage alcohol company in the Nigerian market for 74 years and a subsidiary of Diageo Plc, remain parts and parcel of the Nigerian economy with no intention whatsoever to exit the country.
Speaking at an interface and discussion session with some select journalists at its corporate headquarters in Ogba, Lagos, Musunga, dispelled the rumours that the company may be planning its exit from the country, stating that as matter-of-fact , that it was in Nigeria for the long haul.
The Managing Director/CEO, who led other management team including the Company Secretary Mr. Rotimi Odusola, Ayodele Alabi, and others to take stock and bring the public up to speed on certain steps taken by the brewery giant, said: “Nigeria remains our preferred investment destination despite economic headwinds which affected its businesses in the last operating year”
He noted that despite facing severe macro-economic challenges such as rising inflation, currency devaluation, temporary cash scarcity and insecurity, the company earnings and revenue growth in the audited results for the full year period ended 30th June 2023, resulted from strategic pricing and successfully deploying product mix across categories to counter cost inflation, and an optimised route-to-consumer approach that improved outlet coverage and the use of its B2B platform to improve distribution efficiency.
“In particular, we are holding this interface on the back of the story of our announcement last week about our intention to change some of our products; hence the need for this clarification.
“First and foremost, we have been in the Nigerian market for 74 years, so we’re parts and parcel of the Nigerian economy and we have no intention whatsoever to exit the country,” he clarified.
While noting that it was delighted with the opportunities that Nigeria offers the company, for its brands, Musunga said it is poised to continue to add value to its teeming customers.
“We have a very robust Research and Development as part of our business as we continuously seek what they need, preferences, aspirations of the Nigerian consuming public. With that in mind, we will continue to meet those needs.”
According to him, the mother company Diageo which owns about 58 percent of Guinness Nigeria Plc, made the decision to change the way it distributes its spirits business, especially imported spirits, which constitutes about six percent of its earnings.
“The reason for that is that the market demands quite a bit of capital procurement.
“We have quite a bit of inventory and we have to pay for inputs, which has led to huge debts between us and our current company. If you saw our results last year, when the president announced a new policy one of the biggest impacts was that it affected our bottomline. That currency devalued our balance sheets because we were carrying huge forex exposure.
“We had to revalue that and that moved us from a very healthy position if we were going to report before June if the announcement had been made on July 1, 2023 but, because it was made in June and our year closes at the end of June, the impact due to that devaluation we recorded about N19billion losses “But when we saw the results of other companies, we realised that our own N19billion losses was not too bad because others made substantially large amounts in losses.
“Of course, we are not saying we are comfortable with that. So, we don’t want to carry forward that kind of situation of forex exposure in our balance sheets.
“That is why we’re being tactical about freeing ourselves from marketing our international spirits brands and rather use our forex to buy raw materials with the forex we receive from the government as well as our earnings instead of having to give it away again.”
“That was one of the key motivations for that decision. I think the second is that when you take away that spirit business and you’re left with this large beer business, you’re allowing both to co-exist.
“Guinness Nigeria Plc remains but Diageo has committed to register a company that will sell these spirits with a distribution model that will be more efficient and allow the movements of products.
“So, we’re not moving away from spirit business per se but just being strategic in the way we market our international spirit brands using expertise to market and produce those brands.”
Source: Independet
