Airline body urges African governments to act on opening market access
‘Strategies don’t move people. Now it is time to make the difficult decisions and execute them,’ senior executive stresses.
BUSINESS PERFORMANCE
Supply chain and forex challenges hit Nestlé operations in Nigeria
By our African Marketing Confederation News Team | 2024
Losses for the nine-month period from January-September 2024 increased by 328%. Cost of raw material imports a big factor.
After-tax losses for the Nigerian operation of the world’s largest food business, Nestlé, increased by 328% for the nine-month period from January–September 2024, according to a recent financial statement issued by the company.
Nestlé global headquarters in Switzerland. Photo: Nestlé
This showed that Nestlé continues “to be at the mercy of a foreign exchange volatility that hurt profit and has left its balance sheet battered for more than a year now”, reports the Premium Times Nigeria newspaper.
Converting Nestlé Nigeria’s foreign currency debt obligation into naira, the country’s base currency, more than doubled to N285.3-billion during the period under review. One naira equals 0,00060 US dollars.
Foreign currency-denominated borrowings constitute more than half of the company’s liabilities in Nigeria.
“The company’s dollar obligations leapt in naira terms during the period as monetary authorities in Nigeria executed a one-off devaluation of the local currency in January, while a limited supply of the greenback further weakened the naira,” Premium Times Nigeria says.
Revenue climbs despite weak economy
Despite the weak local economy, Nestlé Nigeria’s revenue for the period climbed 67.8% to N685.3 billion in the period under review.
However, cost of sales increased due to a significant rise in import costs of the raw materials required for business operations in the country.
According to news agency Reuters, the company is working to reduce its supply chain exposure by sourcing alternative raw materials such as cassava starch to replace imported corn starch. It is also now sourcing turmeric locally.
“Nestlé’s big issue is the fx-denominated loans, whose costs have soared due to the devaluation of the naira. Furthermore, fx (foreign exchange) losses have risen by 124%,” comments Trendtype, the emerging markets consultancy.
Last month, the World Bank said Nigeria’s struggling economy is beginning to show positive results from the economic reforms being implemented by President Bola Tinubu.
This provides a glimmer of positivity for the country’s consumers and business community, beset by a range of issues including high inflation, lack of market confidence, reduced spending on FMCG goods, and a shortage of foreign exchange.
Uganda Tourism Board partners with major European ice hockey league
UTB says its ambition is to turn the visibility into interest, bookings and more visitors choosing to explore Uganda.
Researchers explain why 10-second micro ads outperform longer spots
Short ads shown on TV increased website visits within five minutes of airing by 10-40% compared with longer advertisements.
Competition continues to grow in the Moroccan supermarket sector
Supeco’s rapid expansion shows how the discount model is becoming a bigger part of grocery retail in the North African country.
Study identifies harmful paradox behind well-meaning green efforts
Consumers reward visible eco-friendly additions such as reusable bottles, but give little credit to businesses that reduce or remove products.
President Mahama commissions expanded evaporated milk facility in Ghana
Nestlé believes Ghana will continue to play a leading role in the future of Central and West Africa.
Momentum beginning to build for 2027 ACCS gathering in Addis Ababa
Ethiopia’s marketers gather to celebrate hosting next year’s conference – but with an eye on the hard work ahead.
PwC report examines the future of African entertainment and media
Tech is creating more ways for audiences to connect, but lasting value will come from understanding the people behind those connections.
Unilever investment expands its Vaseline production capacity in Africa
The new production line at the historic Maydon Wharf facility in Durban will address growing international demand.
World MICE Awards in Jamaica honour best African and global achievers
Tanzania, Kenya, Zimbabwe, Ethiopia and South Africa all feature in the African meetings, incentives, conferences and exhibitions awards.
AI won’t replace market research. But it will expose weak strategy
Much of the broader conversation around AI in market research assumes conditions that do not consistently exist across many African markets, writes Soyinka Witness.