JOEL OLATUNDE AGOI, Lagos | Saturday
SINCE Nigeria returned to civilian rule in 1999, things have steadily looked up for the country’s once depressed breweries, with sales and profits up, despite the installation of Islamic law in much of the north, industry officials say.
Africa’s most populous country, with a population of more than 120-million, Nigeria is potentially a huge consumer market in many sectors.
And, if business remains bad for some, in the drinks sector things are picking up sharply, industry officials said.
Nigeria has about 10 breweries, with two — Nigerian Breweries, majority-owned by Heineken, and Guinness Nigeria, the Nigerian subsidiary of Guinness International, — accounting for about 95% of the 600-million litres of beer sold here last year, besides other lines.
”The early ’90s saw a downturn in the economy, under the military, and military rule hampered social activities, cutting volume,” said Nigerian Breweries’ representative Vivian Nkem.
But since the return to civilian rule in 1999, a rise in public sector salaries, and a sharp cash injection by the main owners, Guinness Ireland and Heineken, beer sales have grown, he said. Nigerian Breweries’ sales have risen four-fold since 1999, from 100 million to 400 million litres per year, he said.
At Guinness, a similar picture. ”The return to civilian rule has eased the atmosphere. People feel more free to go out and socialise. The good times for the industry are back,” a Guinness spokesman said.
With sales and profits at Guinness and Nigerian Breweries rising faster than in most other sectors in the economy, interest from competitors is growing.
One possible competitor, believed to be studying the market, is South African Breweries, one of the world’s largest drinks groups.
Other companies are competing hard in the large soft-drinks market, particularly in the 12 northern states where Islamic law has been declared, banning public sale and consumption of alcohol.
”We know that other brewers are studying the possibility of entering this market. That is why we are developing ourselves,” Nkem said.
The group’s turnover grew to 29,2-billion naira ($251-million) in 2001 from 17,7-billion in 2000 and 12.03 billion in 1999. Pre-tax profit climbed to 7,5-billion ($64 million) from 6,3-billion in 2000 and 5,3-billion in 1999, he said.
And last year the group began construction of a fifth brewery in the country, at Enugu in the east, with an investment of 200 million euros financed by the Heineken group.
At Guinness, turnover rose to 19,9-billion naira in 2001 from 14,8-billion and 11,9-billion in 1999, with pre-tax profits rising to 5,7-billion from 4,6-billion in 2000 and 3,9-billion in 1999.
Nigeria is Guinness’ third-largest market in the world behind Britain and Ireland and it has four plants in the country.
For the moment, the beer produced here is all for the domestic market and not for export, even within Africa, company officials said.
”We are not going after the exports market aggressively because we have yet to meet local demand,” one said. – Sapa-AFP