After nearly eight decades of operations, Nigerian Breweries (NB) has made history, appointing Juliet Anammah as the first female board chairman of Nigeria’s largest brewer. In this interview with BusinessDay’s Joshua Bassey, Anammah speaks of her vision and strategies to keep the company on the path. Excerpts
What were the major challenges in NB’s operations in 2023 and 2024?
The years 2023 and 2024 were challenging for the Nigerian manufacturing sector, with several companies re-evaluating their positions and exiting the market. Despite these difficulties, Nigerian Breweries—backed by Heineken Breweries—has been operating successfully in this country for over 70 years. While this period has proven tough, we are resolute in our commitment to Nigeria and our continuous investment in our operations here.
How did the company confront these issues?
To navigate these challenges, we developed a comprehensive business recovery plan amidst rising inflation and devaluation of the naira, which have affected interest rates and the cost of raw materials. While these external factors are beyond our control, we have focused on internal strategies to optimise our operations. We’ve scrutinised our cost structure, identifying critical elements that demand investment while employing cost-effective measures in other areas. We also made strategic decisions to adjust our capacity, concentrating on core areas.
A key milestone was the successful launch of our rights issue, which received strong support from our shareholders. This initiative has allowed us to significantly reduce our debt by the end of 2024, a positive outcome reflected in our Q1 2025 financial results.
What factors contributed to your impressive performance in Q1?
In Q1, we experienced an increase in sales volume, which was vital for our top-line revenue. Additionally, our stringent management of raw material costs played a significant role in controlling our cost of goods sold. As I mentioned earlier, we determined which assets to stabilise and ensured some remained inactive to optimise efficiency. For instance, we made prudent decisions about operating our generators based on fuel and maintenance costs, similar to how we manage our production lines. These efforts contributed to a notable improvement in our operating profit this year. Traditionally, finance costs have weighed heavily on our Profit and Loss statement, but our strategic clean-up has effectively reduced both interest expenditures and foreign exchange losses.
What are your future projections?
Looking ahead, we acknowledge that the future remains uncertain. Geopolitical dynamics, like potential tariff adjustments from other nations, add to the unpredictability. Nonetheless, we have confidence in our core strengths in beverage production and brand building, which form the cornerstone of our strategy. We deeply appreciate our shareholders for recognising the positive trajectory of our business; their support emboldens us to believe that this year will be much better than the last.
“Traditionally, finance costs have weighed heavily on our Profit and Loss statement, but our strategic clean-up has effectively reduced both interest expenditures and foreign exchange losses.”
What’s the level of your investment in alternative energy?
We are heavily investing in solar and hydro energy solutions, particularly in our Kaduna brewery, where we have initiated solar power projects that are set to expand. We project that by 2026, our Kudenda Brewery will fully transition to hydropower. This diversification of energy sources is integral to our operational strategy.
NB markets different brands in different regions. How has this strategy contributed to the company’s success?
My relationship with Nigerian Breweries goes back many years, even from my days as a consultant. Our success can be attributed to our deep understanding of consumer dynamics across Nigeria. We recognise the varied preferences of consumers in different regions, and our approach to branding reflects this diversity. Our marketing efforts are tailored to resonate with local cultural values, ensuring that our products meet the unique preferences of consumers across the North, East, South, and West of the country. This strategy has been foundational to our ongoing success.
Given NB’s return to profitability, should shareholders be expecting dividend payments?
We acknowledge that 2023 and 2024 were difficult years during which we were unable to distribute dividends. At our recent Annual General Meeting, we discussed this with shareholders, who remain confident in our recovery plans and the underlying fundamentals of our business. While we maintain a positive outlook, it’s early to determine any dividend distributions as we prioritise our recovery efforts.
Will there be any capital raising to support growth and expansion?
Our current focus is on stabilisation, coming out of two challenging years. Last year, we made a significant investment by acquiring Distell Wines to diversify our portfolio beyond beer. We will closely monitor how this investment impacts our financial performance. If we experience significant market improvements, such as reduced inflation or increased consumer purchasing power, we may revisit the possibility of seeking additional capital for further growth and expansion.
Are you considering shedding any assets to reduce legacy costs?
In the Nigerian context, being “asset-light” may not be feasible since we are a consumer goods company that relies on physical assets like factories for production. Instead, we focus on having the “right assets”. This includes not only production facilities but also logistical assets, such as bottling and packaging materials, essential for our operations. We must assess the capacity utilisation of our factories and lines to identify any underused assets that may need divesting. Our goal is to optimise our asset portfolio rather than indiscriminately reduce our capacity, which is vital for our business continuity.
What strategies do you employ to engage stakeholders?
Stakeholder engagement is paramount, especially with key groups like the media, shareholders, consumers, and communities. The cornerstone of effective stakeholder management lies in clear and straightforward communication. For example, while I can’t predict the responses to significant fluctuations in exchange rates, I emphasise the importance of modelling potential impacts on various business elements. Ultimately, our responsiveness to stakeholder expectations stems from how we communicate changes and our strategies moving forward.
How do you plan to limit NB’s exposure to foreign exchange losses?
Backwards integration has always been part of our strategy, with many of our product lines utilising locally sourced sorghum. While we still face exposure to foreign exchange risks due to imported raw materials, we continuously seek alternative sources. The challenges posed by external factors, such as the war in Ukraine, have made sourcing materials more complex. We are actively investing in local farmer cooperatives to boost sorghum production and exploring the feasibility of local barley production to reduce our reliance on imports.
