The Nigerian Bottling Company Limited (NBC) has said that demand-side pressure on its products was the reason for the closure of its Enugu production plant.
The beverage giant, who is the sole bottler of Coca-Cola products in the country, announced in January that it was closing production at the Enugu plant and would re-purpose the facility as a material handling and logistic hub for the South East region.
“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,” he stated.
Responding to concerns in some quarters over the closure, the Managing Director of NBC, George Polymenakos, said the repurposing of some NBC facilities across Nigeria, Enugu inclusive, was in line with the company’s sustainable business strategy with the overarching goal of improving efficiencies and boosting production capacity to meet the need of discerning consumers.
“Our business optimisation strategy started about five years ago because we have realised the need to have a lean, agile and highly efficient operation to meet the increasing demand from our consumers.
“Therefore, 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 achievable 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,” he added.
Speaking further on the company’s business performance in 2018 and outlook, Polymenakos said the NBC successfully maintained a strong business in its most established markets and grew its reach in some of emerging markets across the country.
Beyond Coca Cola, Fanta and Sprite, he stated that the juice and energy drinks from the stable of the company also grew significantly in 2018, but quickly added that there was still great opportunity ahead 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. In the face of strong macro-economic headwinds, Nigerian Bottling Company continued to grow on some of our categories.
Looking to 2019 and beyond, the Managing Director said that over the last four years, the company has steadily increased the number of its production lines. He stated that the company’s business transformation and optimisation plan which commenced in 2015 involved huge investments worth over €500m for the expansion and upgrade of some key plants including Asejire, Ikeja, Abuja, Owerri, Challawa, Maiduguri, Port Harcourt, and Benin resulting in increased total production capacity.
To sustain the tempo, he disclosed that the company’s business plan would see the team investing hundreds of millions of Euros in its Nigeria operations leading up to 2020.
With regards to increased competition in the soft drinks industry with the entrance of new players, Polymenakos said it is actually a good thing.
“In all the markets where we operate, we are always excited seeing new entrants because we are confident that such development would impact well on consumers and other members of the public. There will be more employment, consumers will have choices and more market would be explored.
“As for us, we are very optimistic about the short- and long-term performance of our business. As industry leaders, we see competition and the availability of choice as a positive sign for the industry. Competition means new innovation, new innovation in a category means the attraction of even more customers to the sector.
“For us at the Nigerian bottling company, our focus is on being able to continue delivering high quality products in the most efficient and sustainable ways, at the best price possible to our consumers. We would never compromise on any of these important elements of our commitment to our consumers.
“We have been operating in Nigeria since 1951, over the years; we have grown with the nation and have continued to provide refreshment in every part of the country. We have the right people, the right coverage, the right infrastructure and processes and exceptional partners,” Polymenakos said.