Sixteen manufacturers listed on the Nigerian Exchange (NGX) have seen an 87 percent growth in their unsold goods inventory in the first nine months of 2024.
According to data reviewed by BusinessDay, these companies had finished goods worth about N161.1 billion in their inventory, representing an increase of N74.85 billion, or 87 percent from the N86.3 billion recorded at the start of the year.
The data reviewed further corroborates a report by the Manufacturers Association of Nigeria (MAN) that the unsold goods inventory in the manufacturing sector hit N1.24 trillion in the first half of 2024.
Among the companies reviewed, Nestle Nigeria had the largest unsold finished goods inventory at the end of September 30, 2024, with N44.1 billion. Nestle’s unsold goods inventory increased by N22.9 billion in 2024, from N21.2 billion at the start of the year.
Nestlé’s growing inventory of finished goods is exacerbating the company’s challenges, as it continues to experience a string of losses that began in 2023 and have worsened into 2024.
In the first nine months of 2024, Nestlé Nigeria reported a turnover of N665.3 billion, reflecting a 68% year-on-year increase from the same period in 2023. However, the group’s net losses expanded to N184.3 billion, while its negative equity position deepened to N112.1 billion.
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Dangote Cement’s unsold finished goods increased by 106 percent during the year to N36.8 billion, from N17.9 billion at the start of the year. Although Dangote Cement is in a better financial position than Nestle, the increase in finished goods inventory highlights that the company’s sales may not be able to keep up with the increase with production capacity.
Dangote Cement produced about 20.674 million tonnes during the nine months, reflecting a 2 percent year-on-year growth from 20.288 million tonnes as of 9M 2023.
Lafarge Africa, another cement maker, recorded an unsold goods inventory of N30.3 billion, from N12.5 billion at the start of the year. During the nine months ending September 30, 2024, Lafarge recorded N479.5 billion in revenue and a net profit of N60.1 billion.
BUA Foods’ finished goods inventory increased by N6.7 billion during the nine-month period to N13.6 billion, marking a 97 percent growth from N6.9 billion at the start of 2024.
Despite a growth in the unsold goods inventory, there was a slight year-on-year decline in the company’s unsold goods ratio. In 9M 2024, BUA Foods had an unsold goods ratio of 1.27 percent, in contrast with 1.46 percent recorded in 9M 2023.
Following BUA Foods was BUA Cement with an unsold goods inventory of N8.3 billion, which was a massive 1272 percent surge from N608 million at the start of the year. Just like other cement makers, BUA Cement is dealing with a slowdown in cement demand as the construction sector records very slow growth.
Beta Glass’ unsold finished goods inventory grew to N8.3 billion during the nine months, from N5.9 billion at the start of the year.
Unilever Nigeria, one of the few consumer goods companies to navigate 2024’s economic challenges successfully with a net profit of N11 billion in the first nine months, reported a 146% surge in unsold goods inventory, rising to N5.3 billion from N2.2 billion at the start of the year.
Cadbury’s unsold goods inventory declined by 5 percent during the year to N3.4 billion, from N3.6 billion at the start of the year. UAC Nigeria’s subsidiary, Chemical and Allied Products Plc, recorded a marginal decline in its unsold goods inventory, which moved from N3.16 billion at the start of the year to N3.12 billion.
Dangote Sugar’s unsold goods inventory dropped drastically to N2.7 billion, from N9.8 billion at the start of the year.
For Dangote Sugar, 2024 has been a challenging year, as the group posted a net loss of N184.4 billion during the nine months ending September 2024.
Salt maker and fellow Dangote subsidiary, NASCON recorded a surge in its unsold goods inventory, which hit N2.4 billion at the end of September, from N164 million at the start of the year.
Notore Chemical’s unsold goods inventory was N759 million at the end of 9M 2024, marking a 19 percent decline from N942 million at the start of the year. Berger Paints’ unsold goods inventory also hit N732 million at the end of 9M 2024, in contrast with N416 million at the start of 2024.
Neimeth Pharmaceuticals, Livestock Feeds, and Meyer Plc had unsold goods inventory of N685 million, N537 million, and N80 million respectively.
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