Nigeria’s economy destined to grow, says Polymenakos
2018 was not all bad for most businesses in the country. Managing Director of Nigerian Bottling Company (NBC), George Polymenakos, in this interview with MARGARET MWANTOK expressed optimism about the Nigeria’s economy. He also spoke on the shutdown of Enugu plant and many more
How can you describe the business environment in 2018 in view of the economy?
The Nigerian economy is growing, though still at fragile level; we are still not meeting gross levels, but Nigeria is a country destined to grow. We have been operating in Nigeria for over 67 years now, and we have a wealth of experience in meeting consumer needs by offering choice and quality and growing a successful business in the country. In the face of strong macro-economic headwinds, Nigerian Bottling Company continued to grow on some of our categories. It was also a year of great learning for us, which will help us do things better.
We successfully maintained a strong business in our most established markets and grew our reach in some of our emerging markets across the country. Our juice and energy brands grew significantly in 2018 but we believe we still have great opportunity for growth. During that period, in line with our ongoing accelerated business plan, we continued to invest heavily in capital expenditure to ensure that we can continue to deliver operational excellence across the value chain.
Can you put a figure to the growth and how you were able to navigate the challenges?
We do not reveal numbers because we are listed in London Stock Exchange, and would be going against the company’s rules.
What is the company’s expansion plan for 2019 business year?
Over the last four years, we have steadily increased the number of our production Lines. The company’s business transformation and optimization plan which commenced in 2015 involves huge investments worth over five hundred million Euros for the massive expansion and upgrade of some key plants including Asejire, Ikeja, Abuja, Owerri, Challawa, Maiduguri, Port Harcourt, and Benin resulting in increased total production capacity. Our business plan would see us investing hundreds of millions of Euros in our Nigeria operations leading up to 2020.
Could you speak further on your 2019 model and retail strategy?
Our model is to capture and serve every need of Nigerian consumer. We have footprints across the country. We are going everywhere that nobody is going. For example, we have a plant in Maiduguri which is already functioning. We have doubled our production capacity.
What led to the shutdown of Enugu plant?
Enugu plant was repurposed, as part of the repurposing of some NBC facilities across Nigeria, Enugu inclusive, is in line with our sustainable business strategy with the overarching goal of improving efficiencies and boosting production capacity to meet the need of our discerning consumers. We have consolidated our production facilities to increase the capacity of the existing plants to meet the pressure from the demand side and accommodate the new offerings we are bringing to the market.
There were inherent restrictions to the extent of manufacturing growth that was possible at our Enugu facility. The facility is not large enough to accommodate our infrastructural enhancement and the sloping terrain of the location made certain operations a bit difficult. While production activities have stopped at the Enugu facility, the company continues to carry out logistics and commercial operations from the location. The NBC Enugu facility is being transformed into a top material handling and logistics hub for the region, to better satisfy our customers and grow our market in Nigeria.
No doubt, the impact of the business on those communities would be huge. What was the level of engagement with those communities before arriving at the decision?
We are pleased to note that the whole process was conducted with utmost respect and consideration for everyone involved. We provided robust and generous severance packages way above statutory requirements and industry average for employees whose roles were rendered redundant. We have engaged with key stakeholders in Enugu State as well as key opinion leaders in the host community and we are committed to investing time, resources and expertise to improve the socio-economic well-being of the community through locally relevant initiatives. We appreciate the support we have received over the years from the government and people of Enugu State, and especially our host communities. We will continue to discharge our obligations to our communities in a sustainable manner
Does this repurposing have anything to do with Chi acquisition?
The Coca Cola Company bought Chi. Nigerian Bottling Company has nothing to do with it. In the future we may choose to cooperate. But for this moment, it is an acquisition that happened from a different entity and I cannot comment on it since I don’t know anything about it.
What sustainability initiatives are you looking at this year?
We strongly believe that our business can only be as strong as the communities in which we operate and our people. We look to create and share value for all our stakeholders and this drives us to create meaningful ways to improve our environment and the communities we operate in, and to deploy innovation to advance general health and wellness. We are pleased that our sustainability efforts were recently recognised. We were presented with the ‘Best Company in Gender Equality and Women Empowerment’ award at the 2018 edition of the Social Enterprise Report Awards (SERAs) CSR Awards.
Recently, to tackle the barriers that prevent women entrepreneurs from succeeding in the marketplace, the company partnered with the Lagos State Employment Trust Fund (LSETF) and Coca-Cola Nigeria Ltd to empower 1,000 women in Lagos state with trainings in financial literacy and business skills, as well as start-up capital to enable their establishment as entrepreneurs. This year, we will take our Youth Empowered programme to more states across Nigeria. Youth Empowered is our flagship programme for Nigerian youth. It trains young people to build life skills, business skills and long-lasting networks to facilitate their building of sustainable businesses or their successful transitioning to gainful employment
How have you handled competition?
Over the years, we have continued to work hard to keep delivering the right level of innovation with new brands and product offerings including, as you will find, in our juice portfolio with recent entrants such as 5Alive Pulpy and packaging such as with Coca-Cola Mama, Solo and Bigger Boy. As we have done over the years, in 2019, we would continue to listen closely to our consumers to understand their preferences and this would guide us to deliver even more industry leading innovations which will be during the year.
Most of your products come in PET, which is creating environmental challenges. How are you balancing your business with environmental stewardship?
Coca Cola and 7up Bottling Company have set an ambitious target to help collect and recycle a bottle or can for everyone we sell by 2030. Regardless of where it comes from, we want every package to have more than one life. In July 2018, Food and Beverage Recycling Alliance (FBRA) signed a three-year partnership with Lagos State Ministry of Transportation to clean up and prevent waste pollution from plastics and other food and beverage packaging on the state’s inland waterways. We pioneered the formation of FBRA, which partners with Lagos State Government and recycle points to address plastic waste management. Together with our partners, Coca‑Cola Nigeria Limited, we are taking the lead, collaborating with other social enterprises, for the collection and recovery of post-consumer packaging materials as part of our extended producer responsibility initiative.
Talking about the expansion, when is it starting and when is it ending, and how much are you putting into it?
During the last three years we did not withdraw our investment despite the harsh economy. We have invested over 100 million euros and these are numbers that can be verified with the state authorities. I would also invite you to come and look at our factories and how we control the quality. We will continue to invest over 50 million euros every year in order to sustain what we have built.
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