Mrs. Victoria Uwadoka is the Corporate Communications and Public Affairs Manager, Nestle Nigeria Plc.
In this interaction with Editors from top media houses across prints and online, she spoke so passionately about the company’s Creating Share Value (CSV) projects across Nigerian communities, the benefits and the challenges of local sourcing of raw materials including Nestle’s capacity building packages and awards for journalists, especially Nutrition writers.
By Franklin Alli
Profits margin and sustainability
Nestle has been in existence for over 150 years and in Nigeria, we have been here for over 57 years. The way we have been able to sustain our business and stay profitable is by investing in the long-term.
For example, remember, when there was a challenge in 2017 with currency devaluation and restriction on foreign exchange by Central Bank of Nigeria, one of the reasons Nestle was not really impacted like that is because in advance of that policy, we have started working on local sourcing.
Yes, we look at it at that time that we were spending trillions and losing money but we are actually gaining because we are building our ecosystem and when that challenges came, we didn’t have too much of a problem because our raw materials are sourced locally. So, we don’t have to buy foreign exchange. And that is the approach that we have been using.
Corporate social responsibility or creating share value
We don’t really look at our investment in the society as corporate social responsibility, CSR; it is CSV, Creating Share Value.
This is because, if you ask us to do anything that is not actually connected to our business, we say “No.”
It must be tied to our business and if the project is not tied to our business, we are not going to do it and the reason it must be tied to our business is because it must bring value to our business, whether in the short term or long term.
So, I am investing in farmers so I can get better quality grains, and I would have that on the long-term.
So, if there is scarcity in the market, I don’t know about it because I have an ecosystem I am working with. So, in the long term, it is to my benefit.
That is why we talk about creating share value- you drive benefit, I drive benefit, and we keep doing it together; you have a responsibility, too and so do I. That is what CSV is all about.
“One of the reasons Nestle was not really impacted like that is because in advance of CBN forex restriction policy, we have started working on local sourcing “
Benefits and challenges of local sourcing
Looking at the situations at the seaports now; you can’t get your raw materials out on time. With the ports situation, you can’t plan and you can’t be sustainable if you are sourcing raw materials from abroad. So, local sourcing is very strategic in our planning.
You ask what the challenges are. Aflatoxin contaminant in crops is an issue. Between 2017 and 2018, in more than 90 communities, Nestle partnered with USAID and CNFA to train more than 24,000 soya beans and maize farmers -22 percent of them women- to reduce Aflatoxin and other contaminants.
This resulted in factory gate rejection decreasing for maize from 15 percent to 4 percent in one year.
Another challenge we are having is road infrastructure; it takes us longer times to get our raw materials from across the country to our factories and the finished products to our warehouses.
One way we are addressing these challenges is training of our partner farmers to help them improve their farming methods to reduce losses and keep their land healthy and sustainable.
And the training we provide is not just for farmers, we provide training across the entire value chain – those who supply the seed, chemicals, those who are warehousing and those who are transporting.
So, we are not just looking at the problem, but providing solutions to it. What we do is to train and to empower the farmers to ensure that the contamination is reduced. There are different points at which contaminations can take place. One is when you are sowing, harvesting, drying and transporting. We are providing training to ensure that we learn the best practices.
Will Nestle have its own farms
No, we are not going to do that. I can tell you, Nestle is in business of producing food products and why should we have farm where we can empower those who have farms to fare better and create employment. We have an ecosystem that works.
Why should we go into transporting the raw materials while we can build up SMEs and small business that are already doing that so that they can utilize their potentials and create employment and build an ecosystem so that we can focus on our area of core competences or strength?
Products being sourced locally and their annual tonnages
Nestlé is committed to the local sourcing of raw materials for its production. We have been doing this for the past seven years, reaching about 80% local sourcing of raw and packaging materials so far.
The five major locally sourced products and average tonnage (average volume per item) are listed below: Corn: 10,000, Sorghum: 6,500, Soya Beans: 5,000, Cassava Starch: 4,000 and Cocoa: 5,000. Other products sourced locally include palm oil and millet.
Thanks to the investment we have made towards increasing local sourcing since 2011; currently, Nigerian farmers’ supply 100 percent of the grains and legumes used in Golden Morn, the malt in MILO is made from sorghum supplied by smallholder farmers who cultivate the grain.
Impacts of insecurity on business
We as a company, we are conscious of that. The entire national security system is our stakeholders-the army, states security service, police, neighbourhood watches and vigilantes spread across the country, we work with them to ensure security of our sales team, distributors as they move from one village to another.
So, we work with them to protect our staff and supply chains. We partner with the security forces in those areas by making sure they are happy, and supplying them what they require in terms of equipment to protect our staff, distributors and customers. By so doing, we try to reduce to the barest minimum insecurity that affects our supply chains/business.
Changes in the taste of Milo
Through the years a lot of additions have been made, a lot of vitamins fortification has been added, and that might have slightly changed the taste.
There is no chemical added to our products. That is one thing that we try to avoid. All our products are natural; if you look at the pack, every ingredients is described – No chemically assisted taste. Example, Dawada is our natural ingredient in Maggi seasoning.