John Musunga

 

Despite the trying times presently facing  households and businesses in Nigeria, one of the major brewing companies in the country, Guinness Nigeria, has stated that its confidence in the nation’s business environment remains unwavering.

 

The company’s Managing Director, John Musunga, stated this in Lagos, recently, during a session with the media, where he refuted rumour making the rounds of the company’s plans to divest its investment in the country, and relocate to a neighbouring West African country.

 

Musunga stated that  though the present economic reforms, embarked upon by the new government, have begun to take their toll on the company’s balance sheet, he however believes such  reforms are necessary for the economy to experience the much-needed growth.

 

He explained that rather than exit Nigeria, the company had, in the past few years, invested a sizable amount of money on some projects, that will further enhance its expansion drive.

 

One of such investments, Musunga stated, is the multi-million dollar water treatment plants, located in its Lagos and Benin plants, which enables it recycle waste water within the plants, and use such water to clean its equipment.

 

This, he added, is in tune with  the company’s  environmental sustainability ethos; since it does not have to resort to the boreholes, for every quantity of water being used for its operations in those plants.

 

He stated further that the company had also purchased a large expanse of land, worth N7.5billion, which it intends to use for logistics, in no distant future.

 

The Guinness Nigeria boss stated that though the recent devaluation of the naira by the federal government,  has negatively impacted its balance sheet, resulting in N19billion, this will not, however, hinder the company from committing more investments into the nation’s market.

 

According to him, the  decision of its  parent body,  Diageo, to change the way  imported spirit business is being distributed  and marketed in Nigeria is one of the strategies  being deployed at enhancing its operations in tune with the present market realities in Nigeria.

 

The new arrangement, he stated, will now see a yet- to -be floated company, marketing the imported spirit brands of Diageo, while Guinness Nigeria concentrates on producing its core business of brewing beer, local spirits and ready -to- serve drinks

 

” All  these imported spirit brands come in as finished products, and therefore demand quite a bit of capital to procure. We have to pay as we receive these goods. It’s been a challenge in the last few years to receive forex  to pay for those goods, which has left  us with huge debt, between us and our parent company, Diageo.

 

“The devaluation of the nation’s currency also affected our balance sheet because we were carrying this huge foreign exchange exposure, so we had to revalue, and the impact of that re-evaluation left us with about a N19billion loss.

 

“So what is happening now is that Guinness Nigeria no longer markets imported spirits from Diageo, because of the challenges of forex. A new company will soon be floated in Nigeria to do that. So instead of seeing this as a challenge, what we, at Guinness Nigeria, are seeing are opportunities. The new arrangement simply means we will be witnessing the birth of a new company, which means more investments into the nation’s business space,” he stated.

 

He also however expressed the optimism that divesting the business of marketing of foreign spirits in Nigeria, will free up resources for Guinness Nigeria, and enable it judiciously utilise its foreign exchange on viable projects that will enhance its bottomline.