Time to declare a state of industrial growth emergency in Nigeria? If you have been paying attention, you ought to have noticed something: Nigeria’s industrial giants are struggling severely. Yes, Cadbury Nigeria Plc just declared a profit of N172 million (about $400,000) for 2020. Unilever was all red at N1.59 billion loss: “Unilever Nigeria Plc a leading consumer goods company in Nigeria declares in its unaudited annual financial report that it made a loss amounting to N1.59 billion in the year 2020. This is according to the information and figures disclosed in the Company’s unaudited financial statement published by Unilever on the website of the Nigerian Stock Exchange”.
Cadbury Nigeria Plc has declared in its recently published unaudited year-end financial statements, that it made a profit of N172 million at the end of its operation in 2020.
This is according to the information and figures contained in Cadbury’s un-audited year-end 31st December 2020 financial statements, published on the website of the Nigerian Stock Exchange.
- Revenue decreased to N35.41 billion, down by 9.97% Y-o-Y.
- Cost of sales decreased to N29.64 billion, down by 4.39% Y-o-Y.
- Gross profit decreased to N5.77 billion, down by 30.73% Y-o-Y.
- Other income increased to 108.04 million, up by 24% Y-o-Y.
- Selling and distribution expenses decreased to N4.58 billion, down by 12.12% Y-o-Y.
You can blame Covid-19 but I do not buy that argument. These companies make what we use daily, Covid-19 or not.
So, there is a problem somewhere and a dislocation is happening, frontally or through the flanks. It is either Nigerians have moved from semovita to black akpo [black local fufu] or someone somewhere is offering the same products at better rates. But one thing is evident: a shift is happening and these firms are under threats. I just hope that people are not getting poorer that few care for what they sell!
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But do not miss that the local ones are doing better; Flour Mills broke sales records. It is possible that its products are more competitively priced since it does not have the global multinational structure of the competitors which can make flexibility on pricing more difficult, besides freedom to source some raw materials locally. Yes, like the ways Accenture and BCG were knocked down in Lagos by the local competitors, and both exited Nigeria. Pricing is a very important component in Nigeria’s business climate now.
Nigeria’s integrated food business and agro-allied group, Flour Mills of Nigeria Plc, has continued its strong performance, growing its profit after tax (PAT) for the third quarter ended December 2020/21 by 91 per cent. The Group posted a revenue of N555.342 billion in Q3, up from N423.479 billion in the corresponding period of 2019/20.
So, in the end, if you do not do sachetization in anything you are doing in Nigeria, you will struggle. Nestle is a foreign brand but has gone full sachet-playbook and is killing it. Update your playbook and begin to sell in “sachets” where necessary.
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We don’t have a reliable tracker on consumer spending here, so it’s hard to know the products people spend most of their money on. Maybe a data from Nestle will help give a pointer…
People didn’t reduce spending on essential products because of covid, rather it increased in many cases, it’s now a case of figuring out where the spending went, and who took it.
If one of the major FMCG operators is declaring SME level of profit, what do we now hear from hotels, cinemas, restaurants, night clubs, bars airlines, transporters, etc? Because some of them were basically grounded, with some still yet to start breathing.
Nigeria is not in a position where any business can even shutdown for one day, we just need to find ways to keep them open, covid or no covid. Even the vaccines are not free, so we better start saving money for them, rather than crippling everything in the name of pandemic.
If you go Mega Chicken at Lekki 2 from 4pm, you will be encouraged that people are still visiting restaurants in good numbers, that’s what we need to be seeing across sectors; we need to revive all the things we destroyed for lack of good judgement.