Coca-Cola Nigeria will start Juice production to boost revenue

Business News

The parent company of Coca-Cola Nigeria, Coca-Cola HBC, has revealed that it will prioritize the production of plant-based beverages, juice smoothies, and PET juice packaging in Nigeria this year.

The company made this disclosure in its Full year 2017 Integrated Annual Reports recently released. The company also vowed to continue to optimize and invest in its production in Nigeria while maintaining a working capital discipline.

As part of its strategy, the company noted it had to change its price pack architecture to provide consumers with affordable options.

While lamenting the impact of high inflation rate on consumers, the report noted that Nigeria’s harsh economic conditions hampered its growth and profitability for 2017, it, however, expressed optimism that improved economic indices will further boost revenue in 2018.

Also as part of its environment-friendly projects, the company said it invested a €1.4 million worth investment in its wastes heat recovery boilers in Nigeria, this is expected to save over 400 tonnes of carbon emission each year.

Revenue impacted by Competiton

The Nigeria Bottling Company NBC, its local unit is faced with stiff competition from SevenUp Bottling company, makers of Pepsi, Mirinda and SevenUp soft drinks and also from new entrants into the market (Bigi-Cola brands)

The introduction of new price pack on its products has also impacted negatively on its sales volume as consumers are forced to buy substitutes which are relatively affordable.

Also its major competitor Seven-up Bottling Company is also struggling to boost revenue and growth caused by a harsh business condition which led to a slow in consumer demand.

The continued poor performance of SevenUp ledto its acquisition by Affelka, a South African private equity firm which now has 100% shareholding in the Nigerian company.

For CocaCola, while its major regions grew volumes by 2.2% in 2017, Nigeria’s volume fell behind. Strong competition from other mid-size drinks made revenue growth difficult for both leaders in the soft-drink market in the country.

 Scaling to Juice production

The planned move to extend its portfolio to juice production as contained in the report is aimed at boosting its revenue base.

Recall that in 2016, Coca-Cola Company and Tropical General Investments Group (TGI Group) – the holding company of Chi Ltd, had announced a binding agreement which will see Coca-Cola Company acquire an initial minority equity shareholding in Chi Ltd with plans to increase ownership to 100 percent within three years, subject to regulatory approvals

Leave a Reply