Strong domestic demand for locally produced goods positions the food and beverage sector as an attractive investment destination.
This comes despite economic woes such as naira devaluation, high inflation rate, and rising energy cost that are pushing some multinationals out.
Modupe Simon, chief financial officer, Krones West Africa, a packaging process company said that now is the best time to invest in Nigeria despite the challenging situation of the country such as the negative effect of devaluation of the NGN currency, high inflation and rising cost of energy resulting in several multinational companies reporting billions of losses and exiting.
“If we consider the general outcome of the Nigerian markets, This is actually the right time to increase investment in the country. Now more than ever is the right time. I say that because mainstream consumers are looking to buy locally made products that are good quality, but cost less than imported,” she said.
She said this at the Krones Investment Summit on Tuesday in Lagos. Nigeria is currently battling with high inflation rates of 33.2 percent in March, increase in petrol prices and foreign exchange valuation has seen industry giants like Procter and Gamble, GSK, Pernod Ricard, and Unilever exit the country.
Simon said that there are so many opportunities for investments within the food and beverage industry value chains.
“From investing in developing quality and sustainable supply sources that will provide raw materials, semi-processed materials and packaging materials for food and beverage manufacturers; to investing in recycling capabilities. The opportunities for investments in the food and beverage industry are endless,” she said.
Simon said the food and beverage manufacturers can engage in backward integration with their key suppliers to increase investments in these areas and harness the benefits from these opportunities.
They are looking to solve raw materials or semi processed materials here in Nigeria for investments. And you’re talking about a food and beverage industry, we need to have a value chain and these opportunities from investing in developing quality and sustainable supply sources that will provide raw materials, semi processed materials, packaging materials for food and beverage manufacturers.
She said that the event aims to create a forum where we can exchange ideas with our existing and potential customers; on various financing opportunities that are available to turn your investment ideas into realities. With Krones as your business partner, we are here to act as the bridge that brings your investment proposals to the right-fit financing package deals.
Ankit Doshi, deputy chief representative Middle East and Africa LBBW, a universal bank, said that it offers structuring of tailor-made & long-term financing solutions of up to 10 years and beyond amount between $5 million – $400 million.
He said that for exporters the benefit of such financing includes liquidity improvement, relief of balance sheet, minimization of economic risks, outsourcing of receivables management and increased competitiveness by offering attractive financing – alternative to local financing.
Doshi said that the risk in offering the service businesses in Africa is Cash flow, Fx risk .
He said that to mitigate the risk they lend to local banks then they lend to businesses in naira.
