NB Plc to achieve 60% backward integration by 2020
In its bid to key into the federal government’s backward integration policy, Nigerian Breweries (NB) Plc is set to achieve 60 percent local content in its raw materials sourcing by 2020.
This was revealed by Mr. Nicolaas Vervelde, Managing Director/Chief Executive Officer, NB, at a pre-annual general meeting media briefing in Lagos.
Vervelde, who said about 50 per cent of the company’s raw material are sourced locally, informed that packaging cost in terms of cans, bottles, crowns, among others have either been reduced or are almost 100 per cent locally sourced.
He said that NB, Heineken Supply Chain B.V. of the Netherlands and other Heineken companies are involved in activities to develop new hybrid sorghum varieties with the potential of increasing the yield/output for sorghum farmers as well as improving the quality of malt, which is a major raw material in the company’s operations.
He added that the company has entered into supply agreements with local cassava starch processors whose activities have impacted positively on the communities where they operate.
Vervelde said, “If I look at packaging cost, almost everything is locally sourced – cans, bottles, crowns, labour and others close to 100 per cent. Only a few things are imported; it is relatively not very impactful and that is with regards to packaging materials. With regards to raw materials, we are close to sourcing 50 per cent locally. It is a very high percentage; we are still not satisfied with that level. We hope with all the activities we are undertaking, we would get to 60 per cent before 2020.
“For several years, we have been talking about the sorghum value chain; we use a lot of sorghum in our raw material, in the form of raw sorghum and malta sorghum. We have two sorghum malt plants in Kaduna and Aba, the biggest sorghum malt plant in Africa. We have been investing in research and development in recent years.”
On product price increase, he said: “Going forward, we will balance the negative effect that price increases can have on the volume and on the consumer’s purchasing power through the speed and the impact of cost increases due to input prices, official and parallel exchange rate and inflation”.
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