Nestlé Nigeria, one of Nigeria’s largest fast-moving consumer goods firms, is tapping local raw materials to boost its operations across the country.
Headquartered in Switzerland, the foods maker has shown that it is not just taking from Africa’s largest economy, but it is also giving, as its interest extends to developing the country’s latent raw materials.
The manufacturer has enrolled thousands of farmers in its backward integration programme, converting inputs into quality raw materials to meet expected standards.
Formerly an importer of raw materials, it now sources local inputs from over 41, 600 local farmers and processors across the country. This makes Nestlé Nigeria one of the local input content drivers, as it sources 80 percent of the company’s inputs locally.
“The Industry has huge needs and we must help farmers improve their yields to meet them,” said Mauricio Alarcon, CEO of Nestlé Nigeria Plc recently.
“To achieve real success with connecting farmers to industry, a 360 degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” he added.
In a statement made by Nestor Finalo, supply chain manager for Nestlé Nigeria, the company said local suppliers constitute more of its direct suppliers. He said the company has up to 1,000 direct suppliers, with 700 of them being local players. The company plans to bring in many more local suppliers as long as they are able to fulfil all the requirements attached, he added.
The baby foods maker has more than three functional factories in Nigeria, equipped with processing locally obtained raw materials such as corn, millet, sorghum and soya, which are major inputs for the company.
According to Nestlé’s manufacturing operations report, the company aims to purchase raw and packaging materials majorly from local sources, believing that it will aid in developing the economy, creating job opportunities and maintaining a strong stance for the naira against continuous dominance of the dollar.
According to data from the Manufacturers Association of Nigeria (MAN), utilisation of local raw materials by manufacturers in Nigeria stood at 56.6 percent in the first half of 2018. Local sourcing of raw materials in food, beverage and tobacco sub-sector in the first half of 2018 was 79.12 percent.
Nestlé Nigeria is one of the companies responsible for this high local input sourcing in the industry.
The company also helps farmers improve their living by investing in sustainable farming practices through the Sorghum and Millet in the Sahel, Feed the Future Nigeria, and Nestle Maize Quality Improvement projects.
BusinessDay analysis of the company’s financials for nine months to September 30, 2018 shows that its revenue was N203 billion, which was a 10 percent increase from the N185 billion recorded in the same period of 2017. The profit grew by 44 percent to N33 billion, having had N22 billion in 2017.
Its profit before tax was N48 billion, which is 39 percent higher than N34 billion achieved in the same period of 2017.
Nestlé’s total equity also witnessed a 22 percent increase, having had N56 billion in 2018 as against the N45 billion in the same period for 2017.
Furthermore, the company’s board members are set to meet to discuss and approve for public disclosure, the externally audited financials for the full year 2018 on the 4th of March. Issues relating to dividends payment will also be discussed.
Gbemi Faminu
