Guinness invests N4.8bn on new spirit production line in Benin
Guinness Nigeria Plc has commission a new spirit line in Benin, Edo State where its spirit brands will henceforth be produced from. This is in line with its strategic plans to reduced spending on imports; increase exports and generate foreign exchange.
The N4.8billion production line, with a design capacity of 1.2 million cases, would have raw materials for the production line sourced locally.
With this line, Guinness Nigeria is now able to produce previously imported spirits locally. What this means is that the company will offer a wider variety of products to consumers at a more affordable price point.
Some of the brands to be manufactured locally include Smirnoff X1 intense chocolate vodka, Smirnoff Extra Smooth Vodka, Gordon’s Dry Gin, Moringa Citrus Blend, McDowell’s No. 1 Reserved Whisky, McDowell’s VSOP and Royal Challenge Finest Premium Whisky.
The brewery giant disclosed that as part its broader local raw materials (LRM) sourcing, it is looking to increase locally sourced production inputs to 70% in the coming years and this fits in nicely with Diageo’s ambition to get LRM sourcing across the continent to 80% by 2020.
Commissioning the production line, Governor of Edo State, Mr Godwin Obaseki, commended the company for the vision to expand its business in the state, stating that his administration was willing to partner with Guinness in its 200,000 jobs by ensuring the production of cassava that would meet the company’s raw materials needs.
Recalling that years back, Guinness had spent £300 million to expand its plant in Edo, he noted that Edo government was pleased to have the firm in the state, just as he pledged to work with the brewery firm and other companies in the area of agriculture production.
Speaking after commissioning the production line, Governor Obaseki charged manufacturers to see the current economic recession as an opportunity for backward integration and expansion of their business horizons.
He said: “This is a company I am very close to and very fond of, and so, I am quite excited that one of my first official corporate functions as Governor is to commission the new spirits line for the company. We are very pleased that Guinness is part of the landscape of Benin and Edo State, and has been so since 1974. And so, for us, you are a partner, and as a state, we will take our partnership very seriously. Even though the economic environment in Nigeria today is quite challenging and difficult, for us in Edo State, we see opportunities embedded in those challenges,”
Also speaking at the event, Chairman, Guinness Nigeria Plc, Mr. Babatunde Savage noted that the commissioning was part of the company’s rich and prestigious legacy and a testament to its long term commitment to Nigeria and her citizenry.
“You will recall that on January 1, 2016, we also took over the distribution rights of Diageo’s International Premium Spirits (IPS) brands in Nigeria. Now, with this addition of locally manufactured spirits to our portfolio, we are the first and only truly total beverage alcohol company in Nigeria.
This development is expected to help boost the financial fortunes of Guinness Nigeria which in October, reported a net loss of N2.2bn in its first quarter results ending 30th September, further worsening its financial condition. The company had earlier in September declared a net loss of N2bn in its 2015/2016 full-year results which ended in June 2016, blaming it on a weak economic environment and foreign exchange headwinds.
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