E-Malt.com News article: The Netherlands & Nigeria: Heineken comments on African investments

Heineken N.V., the majority shareholders in Nigeria Breweries Plc (NB), said on November, 13 that it had invested about 1.7 billion euros in its operations in 20 countries across Africa including Nigeria since 2005.

Out of this amount, NB - Nigeria’s brewery giant - through which Heineken operates in the country- accounted for about N86.3 billion within the last five years.

While the Heineken Group announced the commitment of this amount in the economy, which had earned it huge returns, it however expressed concerns about the sorry state of electricity power infrastructure in the country.

Nevertheless, Chairman of the Executive Board and Chief Executive Officer, Heineken N.V., Mr. Jean-Francois van Boxmeer, who addressed a gathering of about 60 investors from Nigeria, Europe and the United States, showed that the group was undaunted by the power infrastructure challenge, saying “Heineken has a strong commitment to grow with Africa.”

Stressing that “We believe in Africa”, Boxmeer noted that Heineken had been investing ahead of the curve to meet growing demand.

He said the Dutch brewery group saw a huge development in Nigeria and other African countries and the company had “fantastic opportunities to build on its premium and brands” in the near future, having observed a positive trend.

The chief executive, who disclosed that 26 per cent of the group’s profit came from Africa and Middle East (AME) and the group accounting for 70 per cent of the market share, noted that “we are an important contributor to economic development in Nigeria and Nigerian government recognises that.”

Apparently expressing worry about the deplorable state of electricity infrastructure in the country, Managing Director, NB, Mr. Nico Vervelde, in his presentation, said the company had been running its breweries’ operations with electricity power independent of government since the latter’s sources had been irregular.

According to him, “very often when you see light in the evening, it is often driven by generators and I’m sure in the last 24 hours, you must have experienced electricity cuts in your hotel and the Civic Centre. The estimated electricity generation that is needed by the country is 10,000 megawatts but 4,000 megawatts of electricity what we have now. That is the reason we don’t have adequate electricity infrastructure. Our breweries are self-providing in terms of energy and electricity.”

Vervelde said this poor power infrastructure notwithstanding, NB has been able to sustain its investment levels, meeting strong consumer demand across the country.

Giving a breakdown of the NB’s N86.3 billion investment since 2007, managing director said the company committed about N5.6 billion in 2007, which was increased very significantly to N25.4 billion in 2008.

He added that, in 2009, which was characterised by the global economic crisis and capital market downturn in Nigeria, NB investment in its operations dropped to N18.3 billion and was increased to N18.8 billion in 2010. He also pointed that currently, the company had invested N18.2 billion.

14 November, 2012