• Friday, March 29, 2024
businessday logo

BusinessDay

We have survived different phases of Nigeria’s political and economic history – NBC chairman

Apata

Amb. Segun Apata is the board chairman of Nigerian Bottling Company (NBC) Ltd who is leading the company to more investments in Nigeria. The company plans to invest additional $1 billion in the next 5 years in Nigeria after investing over US$ 1.7 billion between 2011 and 2021. In this interview with Daniel Obi, the board chairman looks at the journey of the company after 70 years of operation, impact of the business on the society and challenges. Excerpts

Let’s begin by understanding your journey to the Nigerian Bottling Company (NBC) Ltd., after so many years in the public service?

We must view Nigeria from two operating sides – the private and public sectors – which must work together for the prosperity of the country, just like the Coca-Cola System in Nigeria comprising of Nigerian Bottling Company Ltd and Coca-Cola Nigeria Ltd are working together seamlessly. I joined the Nigerian Foreign Service as the first set of the second decade of Nigeria’s independence, and the first set after the Nigerian Civil War. It was an opportunity to interact and interface with actors both in the private and public sectors within and outside the country. Incidentally, my first assignment abroad was in Dublin, Ireland where the Charge d’Affaires assigned me the responsibility of fostering economic relations between Ireland and Nigeria. On leaving the Nigerian Foreign Service, I was invited to join the Board of Nigerian Bottling Company (NBC) Ltd. I saw it as opportunity of continuing the journey of attracting foreign investment into the country.

How do you feel being a part of a global brand that within its 70 years of existence in Nigeria has built a culture of excellence?

We are lucky as a company to have travelled this journey of 70 years. Perhaps, we should cast our minds back and ask – how many companies, whether family founded companies or multinationals, which operated in pre-independence Nigeria are still in existence till today? We are one of the very few that have survived different phases of Nigeria’s political and economic history. The credit goes to our founder – A.G Leventis and the Leventis Family who have consistently and unflinchingly remained committed to the country. The journey which AG Leventis began in 1951 as the Coca-Cola bottler for Nigeria with its first manufacturing plant in the basement of Mainland Hotel Ebute Meta is what we are celebrating this year. In 70 years, we have expanded the business in all facets – the product range, as well as, all packaging types. Currently, we are the only manufacturer with hot-fill line in the country. What is most impressive is the US$ 1.7 billion investment that our Parent Company, Coca-Cola Hellenic poured into the country in last ten years (2011-2021.) Before the investment, that is in 2010, we produced about 180-million-unit cases; and nine years later, with the investment, we closed 2020 with over 300-million-unit cases. We will surely celebrate our 70th anniversary with an impressive close out in December 2021. We have moved away from one line and two lines plants to huge plants in different parts of the country. The Minister of the Federal Capital Territory has just commissioned the 5th line in our Abuja Plant which incidentally is both fastest line and the line with biggest capacity in the plant. It produces 42,000 bottles per hour. The same achievement has been recorded in Benin, Port Harcourt, Kano, Owerri and Asejire. We are expanding our Maiduguri Plant which we have never closed down in spite of the challenges in that part of the country. We celebrate the fact that our Ikeja Plant is largest Coca-Cola Plant in Africa. We have announced that we will be investing US$1 billion over the next five years. I like to emphasize that the investment is not just on machinery and processes but our people – the core of our business.

Read Also: Coca-cola Nigeria appoints Alfred Olajide as new MD

Yes, it is not easy doing business in Nigeria. It is a very tough and challenging environment. Yet, we remain standing despite the turbulence in our macro-economic environment. Our Leventis pedigree has a lot to do with our resilience. Of course, government policies impact businesses, and the macro-economic environment can be very tough sometimes – whether in fiscal policies or monetary policies. But here we are – patient and always engaging – because NBC and the Leventis Family are committed to the country. It is important to point out that NBC is just one of the 28 countries in which our Parent Company, Coca-Cola Hellenic is doing business. All the 28 countries are always competing for investment. Besides, funds could be utilized by our Parent Company to acquire other businesses or territories within the Coca-Cola System. Interestingly, Coca-Cola Hellenic has just acquired the Coca-Cola Bottling business in Egypt. With this acquisition, Egypt joins Nigeria as the second African country within the Coca-Cola Hellenic Group.

Talking about investing in logistics, and with Nigeria being difficult in that area, how are you managing security, roads when it comes to logistics?

What we have done in large measures as a business, is that we have to view the impact of the business on the whole environment.
There are many huge businesses that depend on us for survival. For instance, the trucking business -many trucking companies are third party service providers to NBC. Remember that we manufacture in 8 Plants. A number of companies, some of them with 15-20 tractor-trailers cart products from our Plants to all parts of the country. Besides, there are major Distributors of Products across the country with huge warehouses and 2-5 delivery vans -delivering products to outlets across the country including the Mama selling suya and boli. There are many other businesses directly anchored and tied to our Coca-Cola business, such as the companies supplying us sugar, glass bottles, crowns, plastic containers etc. It is a complete value chain across the country. Undoubtedly the security situation in the country imposes huge challenges on us as a manufacturer and on our distributors and outlets across the country.

Let’s touch on the area of CSR. What has the company done to justify its bond with the society?

We are very proud of the way we contribute to our communities. Our presence in the smallest villages within the country makes a difference, because we are very sensitive to the needs of our communities. Let me cite the ‘Lady Mechanic Initiative’ – I was excited at the idea of the ladies becoming auto mechanics. NBC leadership was very passionate in supporting the initiative and with that single project, there are now several lady auto mechanics in the country. Then we had the Youth Empowerment program across the nation – training our youths in different skills. We have reached over 30,000 young people in the last 5 years – assisting to train them on how to make paint, shoe making and simple manufacture of everyday products etc. We assisted in the renovation and construction of a number of classrooms across the country. The Safe Birth Initiative aimed at reducing the infant and maternal mortality rate in Nigeria is another CSR we are very proud of. All these initiatives are not only making impact in the communities but positively improving the lives of our people.

The beverage industry today is a competitive space and can be a challenging one. What is your view?

We are never afraid of competition. In fact, we welcome competition, but on a level playing field, where all of us in the marketplace face the same parameters – whether in terms of monetary policy, fiscal policy, or a question of approvals in a fast-tracked manner. There should be level playing field to encourage competition.

NBC is obviously part of a global network of the Coca-Cola System. Coming home to Nigeria, how has NBC borrowed from technological advancements abroad in their operations, considering that Nigeria is underdeveloped in this area?

The world is changing rapidly. It is obvious that innovation, adaptability, and creativity are what will drive any business. Comparing the lines we used to manufacture our products 70 years ago with those of today, the lines of 70 years ago would only be fit for the museum. The machinery and equipment we use to produce our products are not manufactured in Nigeria. We purchase the lines from abroad. We often run into turbulence accessing the foreign exchange to purchase these lines. This slows down the pace of our investment and by implication our capacity to employ people. It equally impacts others who are dependent on us in our value chain to earn a living. Yes, we have a well-established system where the manufacturers of the lines physically train our people in our plants.

And when necessary, we embed our staff members with the manufacturers of the equipment to acquire the skills of maintaining the equipment. Consequently, we have a pool of very knowledgeable and skilful people who manage these equipment. We also train our staff in other Coca-Cola Hellenic countries.

Some years ago, NBC delisted from the Nigerian Stock Exchange (NSE). What informed that decision? What was the objective? And how has it impacted on operations?

We are part of a multinational that has operations in 28 countries. Nigeria was the only subsidiary listed in the local Stock Exchange at the time. The subsidiaries in Russia, Poland, Greece, Ukraine, Switzerland etc were not listed in the local exchanges.

But our parent company, Coca-Cola Hellenic is listed in the London Exchange. The major drawback of local listing was that it was a negative in attracting investment from our parent company. Essentially the decision of the Board to restructure its shareholding was driven by the desire to accelerate investment in our operations in the country. The US$1.7 billion we spoke about earlier and the US$1 billion on the pipeline amply validate the decision of the Board. It’s worth recalling that the Scheme of Arrangement was approved with over 95% at the court ordered meeting.

Let’s talk about the environment. Looking at the products you manufacture, how are you involved in sustainability and being eco-friendly?

The Coca-Cola Company and all its bottlers have championed and continue to champion sustainability as our overriding objective. With regard to plastics, we are part of the Food & Beverage Recycling Alliance (FBRA) – where we play a major role. There are many companies now collecting these plastics and recycling them for other uses. We will continue to use plastics, but we are also focussed on sustainable use of plastics