Beverage companies closing shop over forex – labour

Manufacturing concerns in the food and beverage subsector are at the brink of collapse over the increasing difficulty in sourcing foreign exchange for importation of some components of their products.

Companies mostly affected are those that source raw materials outside Nigeria, such as Friesland Nigeria plc, 7Up Nigeria plc, and others that use ethanol, dairy products, wheat and cassava in their daily production process.

The development, according to Quadri Olaleye, president, Food, Beverage and Tobacco Senior Staff Association (FOBTOB), puts millions of jobs in the industry at risk.

“That is why it is imperative for the Federal Government through the Central Bank of Nigeria (CBN) to take a second look at the forex policy to avoid shutting the industry,” Olaleye said, at a news conference in Lagos, on Wednesday.

According to Olaleye, where the raw materials can be found locally, they are not available in commercial quantity.

The labour leader said the sector was critical to the survival of the country with about 3 million workforce, warning that the country would be adversely affected if the sector was shut.

By the end of April, about 900 workers from different part of the sector would have lost their jobs because of the policy, as most companies sack monthly, he said.

“3,000 workers were sacked between 2012 and first quarter of 2015, and 405 have been sacked between December 2015 and today. There are about five persons dependent on one employed person.

“The effect of continuous redundancy poses a social security problem. Every company in the sector is calling for redundancy of workforce due to forex policy,’’ the labour leader said.

He said it was regrettable that over the years, these companies had given excuses such as difficult business terrain, dwindling profit, irregular and insufficient power supply to downsize workforce.

He however advised the companies to be innovative and creative to be able to overcome its current challenges, and condemned the continuous employment of expatriates who were paid huge allowances while Nigerians were deprived of the opportunity of getting good jobs.

These are part of the drain leakages that should be blocked to remove the pressure on the profitability of the companies, he said.