Workers of Nigerian Breweries Plc are set to lose their jobs as the brewer is shutting down two of its nine factories in Nigeria over rising operation costs.
The decision is coming after the brewer recorded N106bn loss in 2023 as a result of challenging economic factors ranging from heightened operational costs, rising inflation rates and foreign exchange volatility.
Nigerian Breweries said in a filing seen by NewsNGR that the decision is part of the plans for a company-wide reorganisation aimed at securing a resilient and sustainable future for its stakeholders.
The company said it informed the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), that “its proposed plan would include operational efficiency measures and a company-wide reorganisation that includes the temporary suspension of operations in two of its nine breweries.”
The letter which was signed by the company’s Human Resources Director, Grace Omo-Lamai, invited both unions to discussions on the implications of the proposed measures.
NewsNGR had exclusively reported that the company’s workforce was reduced by 380 workers in 2023 as the brewer struggled with the loss.
Nigerian Breweries had revealed plans to raise capital of up to N600bn by way of a Rights Issue, as a means of restoring the company’s balance sheet to a healthy position.
Last year, net finance expenses of N189bn were recorded by the company in 2023 driven mainly by a foreign exchange loss of N153bn resulting from the devaluation of the naira.
Speaking on the decision to shutdown two factories, Managing Director/CEO Nigerian Breweries Plc, Hans Essaadi, said the decision was vital amid the persistently challenging operating environment.
He said, “The tough business landscape characterised by double digits inflation rates, naira devaluation, FX challenges and diminished consumer spend has taken its toll on many businesses, including ours.
“This is why we have taken the decision to further consolidate our business operations for efficient cost management. It will also improve our operational and financial stability and help return our business back to profitability, as we work together to secure the business for today and for future sustainable growth.
“We recognize and regret the impact that the suspension of brewery operations in the two affected locations may have on our employees. We are committed to limiting the impact on people as far as possible and providing strong support and severance packages to all affected.”