We shut plants for optimization strategy — NBC
Dealers of Nigerian Bottling Company (NBC)’s products in the northern part of the country, are lamenting the harsh conditions under which the company’s products are supplied to them.
The dealers and retailers say since many of the plants in Northern Nigeria were shut down, they have been undersupplied and as a result, have not been able to meet the demands of consumers to recoup their investments.
The company’s website shows that NBC has 11 functioning plants but only nine of the plants were listed and they are, Abuja, Asejire- Oyo State, Benin- Edo State, Challawa- Kano State, Enugu State, Ikeja- Lagos, Maiduguri- Borno State, Owerri- Imo State and Port Harcourt,
The NBC has shut down its plant in Kaduna and Plateau State and had made to shut down the one in Kano until a traditional ruler intervened.
As it is, only Abuja, Kano and Maiduguri are left to service the entire 19 northern states.
In Kaduna, our correspondents learnt that many of the dealers who stock the products in the warehouses when there were adequate supplies from the plant in the state capital, have suffered losses running into millions of naira due to the inability of the company to live up to its side of the bargain to supply them adequate products.
The dealers, our investigations have shown, have invested monies running into millions of naira in terms of procuring facilities like warehouses, personnel to man the facilities as well as capital deposits in banks.
They lament that they currently receive less than 30 percent of the quantity they were getting before the closure of the plants placing them in very difficult positions both in terms of meeting consumer demands and recouping their investments.
NBC products like Cocacola, Fanta and Sprite are usually on high demand during the dry season and festive periods, hence, the dealers usually record high sale of the products that cover their losses in the cold seasons.
But this year, after making huge deposits and securing warehouses and hiring personnel to guard and maintain the stores the dealers say they were being undersupplied the products.
Our correspondents who went round the town confirmed that retailers too were affected as they don’t get enough of supplies especially, Coca-cola.
A restaurateur at Waff Rod in Kaduna, told our correspondent that she gets just about two crates in a week instead of the two, she used to on a daily basis.
Our correspondents learnt that the problem started when the NBC shut down its plant in Kaduna about two years ago, making the dealers to rely on supplies from Abuja.
“Since then we have not been getting our normal supplies but this year have been terrible since we can hardly recover even the cost of investment not to talk of making a profit,” said one of the dealers.
Another dealer told our correspondent that she had to lay off the staff at her warehouses due to inactivity and loss. He lamented that as things are, there is no indication that anything is been done about it.
In Jos, Plateau State, since the Nigerian Bottling Company closed down its plant about a year ago, dealers say the soft drink is now transported to Plateau State from Ibadan, the in Oyo State capital.
Dealers of the product told our correspondent that the company plant along Yakubu Gowon Way in Jos has been converted into a deport. They said the scarcity of the product sometimes experienced was due to the closure of the plant in Jos which has automatically diverted the traffic to other regions of the country.
“Shockingly, some people are coming all the way from Niger Republic to get Coca Cola.
I don’t even know what is happening around the Kano axis because for people to come from Niger sends a message that they are probably unable to get goods from Kano,” said one of the dealers.
He stated that the scarcity sometimes experienced is bad for his business because it diverts his customers to other competitors adding that, “if my product is finished and the company is yet to make supply, my customers will have no choice but to turn to other dealers and in that process, you could lose a customer.”
Another dealer told our correspondent that the company pays transporters about N350,000 as overhead cost to transport the product from Ibadan to Jos while some dealers independently transport the soft drinks at private costs but later sell to retailers at higher costs.
“With the closing down of the Jos plant, many people lost their jobs because the company was trying to cut down cost of production and to maximize profit.”
“Shutting down the Jos plant had a ripple effect on employment though it means that they will create more employment in places like Ibadan and Lagos because they will have to employ more people to work in shifts but that also means taking jobs out of Jos and moving it elsewhere thereby making youths in Jos vulnerable,” said a dealer.
Speaking with Daily Trust in Lagos, Public Affairs and Communications Director, Nigerian Bottling Company (NBC), Mr Ekuma Eze, confirmed the development saying that closure of some plants, seven of them, was part of the optimization strategy embarked upon by the company.
He, however, denied any involvement of a traditional ruler in the business strategy of the company.
“Nothing is responsibility in shutting down some of our plants. What has really happened was that we embarked on optimization strategy to cut cost and remain strong in the market. When one plant can produce what five plants can do, why do you need to keep the five running? There is no iota of truth that NBC is rationing supply to its consumers”, he said.
Eze said the company is embarking on expansion scheme on some of the existing plants.
“We have expanded the capacity of our Kano, Ikeja, PortHarcourt and Owerri plants by building more lines of operation.
Eze said the shut plants have been converted to distribution centers while production facilities there are still intact.
“The difference is that we are not producing from the shut plants. What we have done was to increase our fleet capabilities to serve those areas. Those facilities are still there at the plants but we are not producing from them.
With the capacity we have, we are more prepared to meet the market demand. There shouldn’t be any scarcity and ultimately, consumers should get the products. We have the capacity to produce more and bring supply to places we are and even other areas”, he said.