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Nigeria looks to export Guinness to South Africa to boost dwindling sales
WITH domestic sales falling as beer drinkers switch to cheaper brands amid a slowing economy, Guinness Nigeria Plc plans to ramp up its exports, partly, as a way to address the brewer's shortage of foreign currency in Nigeria, which it depends on to purchase imported goods.
The unit of London-based Diageo Plc will consider selling Guinness stout and the herbal drink Orijin in South Africa to boost the proportion of beverages it sends to international markets, chief executive officer Peter Ndegwa, told Bloomberg during an interview in Lagos.
"With all the challenges we have had with foreign currency availability, we realise that export is a great opportunity to gain foreign exchange and stabilise," Mr Ndegwa said. "We have heard a lot of inquiries from South Africa. We are currently in the process of seeing how we can export some of those brands to the country."
Generating foreign currency from exports would help Guinness Nigeria offset a scarcity of dollars in its home market caused partly by a slump in oil revenue, the country's biggest earner. The economy is forecast to shrink 1.8 per cent this year, according to the International Monetary Fund.
Guinness Nigeria is also expanding its range of spirits to increase choice in its more affordable product range. "We are focused on brands that are lower priced, by either improving distribution or improving awareness," Mr Ndegwa said. "We have spirit brands across all categories but the growth is mid-to-lower end."
The brewer will invest US$15.9 million in a plant in Benin City, in the south of the country, to reduce spending on imports, the CEO said.
Earnings after tax fell 83 per cent in the nine months through March, while revenue declined 18 per cent to $220 million.
The unit of London-based Diageo Plc will consider selling Guinness stout and the herbal drink Orijin in South Africa to boost the proportion of beverages it sends to international markets, chief executive officer Peter Ndegwa, told Bloomberg during an interview in Lagos.
"With all the challenges we have had with foreign currency availability, we realise that export is a great opportunity to gain foreign exchange and stabilise," Mr Ndegwa said. "We have heard a lot of inquiries from South Africa. We are currently in the process of seeing how we can export some of those brands to the country."
Generating foreign currency from exports would help Guinness Nigeria offset a scarcity of dollars in its home market caused partly by a slump in oil revenue, the country's biggest earner. The economy is forecast to shrink 1.8 per cent this year, according to the International Monetary Fund.
Guinness Nigeria is also expanding its range of spirits to increase choice in its more affordable product range. "We are focused on brands that are lower priced, by either improving distribution or improving awareness," Mr Ndegwa said. "We have spirit brands across all categories but the growth is mid-to-lower end."
The brewer will invest US$15.9 million in a plant in Benin City, in the south of the country, to reduce spending on imports, the CEO said.
Earnings after tax fell 83 per cent in the nine months through March, while revenue declined 18 per cent to $220 million.
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