LAGOS- The Managing Director, Nigerian Breweries Plc, Mr Nicolaas Vervelde, has said that the company had commenced a merger and operational integration with Consolidated Breweries Plc.
Vervelde said at the company’s 2014 pre-Annual General Meeting media briefing in Lagos that the operational integration commenced in January 2015 and would be concluded very soon.
He said that cross selling of the company’s combined portfolio had started with one head office and one management team.
The managing director said that the company had integrated its brand portfolio and eliminated duplication of activities.
He said that the company embarked on the merger to ensure operational efficiencies from supply and distribution networks, improve economies of scale and value creation through increased competitiveness.
“The merger process is progressing well with focus on maintaining leadership and outperforming competition,” Vervelde said.
He said that the impact of the merger would be evident in the company’s operations in the next couple of weeks.
The managing director said that the company would remain committed to Nigeria and would embrace future investment opportunities, to remain a world-class company.
Nigerian Breweries in December 2014 announced that it was merging with Consolidated Breweries Plc.
It was also reported that four NB shares exchanged for five shares of Consolidated Breweries or a cash Consideration of N120 per share of Consolidated Breweries held.
On the company’s 2014 result, Vervelde said that the falling oil price, devaluation of the Naira and low dispensable income, affected operational performance.
“2014 was a highly competitive year with 18 lager brands in the market, with inequalities in income distribution and limited purchasing power,” he said.
The managing director said that the company was committed to cost leadership, to maintain its leadership position in the industry.
He said that the company embarked on cost reduction strategies such as logistic costs and cost of raw materials, to reduce the impact of unfriendly operating environment on its operational performance.
The managing director said that 60 per cent of the company’s raw materials were sourced locally, to reduce cost of operations.
Vervelde also expressed fears that the nation’s economic challenges would likely persist throughout 2015, stressing, however, that the long-term fundamentals of the Nigerian market remained positive.
The company in 2014 posted a revenue of N266.37 billion, compared with the N268.61 billion achieved in the corresponding period of 2013.
Profit-before-tax dropped to N61.46 billion from N62.24 billion posted in 2013, while profit-after-tax stood at N42.52 billion, against the N43.08 billion in 2013.
The company declared N37.21 billion dividend or N4.75 per share, compared with the N34.03 billion or N4.50 paid in 2013.
