Nigeria’s FMCG sector is bleeding, says Agu, Lacasera marketing boss
The Group Marketing Director, Jotna Nigeria Limited, maker and marketer of the Lacasera brand, Emmanuel Agu, has taken a holistic assessment of the Nigerian business environment and observed that the country’s Fast Moving Consumer Goods (FMCG) market segment was seriously bleeding.
Agu, speaking during an exclusive interview with MARKETING EDGE in Lagos said judging from recent performance records of major multinational concerns operating in Nigeria’s business environment, the FMCG sector was seriously bleeding and this, he said was attributable to the prevailing adverse and unfriendly business operating environment in the country.
According to the company boss, a lot of manufacturing concerns currently operating in the country were going through very severe and adverse economic environment and a good number of them were presently closing down their manufacturing plants because the ease of doing business indices were completely lacking in the Nigerian economy.
He added that the situation was rather made worse considering that it was becoming increasingly difficult to sustain local production of consumable goods in the country, while imported goods were making quick foray and becoming preferred choices to Nigerian made goods in the market.
“What you would see from reports of companies result is that basically the FMCG category in Nigeria is bleeding, and the result may not be unconnected with the way our economy has been.
“The entire market in terms of FMCG is bleeding. Could we attribute that to the economy, may be yes; or could we attribute that to the unfriendly nature of doing business in Nigeria where cost of doing business is so high? Water, electricity, good roads in terms of logistics and all the indices that make manufacturing business successful the world over is completely lacking in Nigeria.
“And over and above you are seeing a high level of taxation, from 5 per cent VAT now to 7.5, and then in the beer segment you see increase in the excise tax that is also impacting on their profit margins, and again the proposed exercise tax that the government is thinking about for the carbonated Soft drinks (CSDs), even though they haven’t implemented that.”
“So the economy is harsh, and it makes operating a manufacturing concern in Nigeria a very difficult one. And the bulk of all we are talking about here are all manufacturing concerns that have established businesses in Nigeria,” he added.
Giving further analysis on sector by sector performance of operating businesses across the FMCG industry, Agu noted that although the Nigerian market was fast evolving and dynamic in nature, a lot of innovative changes were constantly taking place in all facets of the market ecosystem.
“It’s actually becoming very unpredictable because you don’t know what next your big competitor is having up their sleeves. So today, I think CSD segment is one of the fiercest battle fields that you see in the FMCG, with the big multinational corporates fighting with the insurgent brands that are making headway,” he added.
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