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Asian, Turkish firms takeover from exiting multinationals – Report
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By Kayode Sanni-Arewa
Multinational companies continue to exit Nigeria in recent times, some Asian, Turkish and even local companies have been stepping into the spots they vacated.
Last week, Guinness Nigeria Plc announced that Tolaram Group acquired 58.02 per cent shareholding divested by Diageo, its ultimate parent company in a deal which is expected to be finalised in 2025.
President Bola Tinubu had commended Tolaram Group for the expression of faith in Nigeria through the acquisition in a statement issued by his special adviser on media, Bayo Onanuga.
This is the latest in the spree of takeovers in the economy. According to Bloomberg, a local firm, the Fouani Group, operates a diaper and sanitary pad plant in a complex where Procter & Gamble Co. had closed a $300m facility making the same products.
Lagos-based Fidson Healthcare Plc is expanding its manufacturing range after the UK’s GSK Plc closed its Nigerian distribution arm. Turkish diaper maker Hayat Kimya AS has also established itself in Nigeria.
Nigeria, with a population of more than 200 million, is Africa’s most populous nation, in theory presenting a huge market for consumer goods. However, rampant unemployment, widespread poverty and insecurity, a plummeting currency, sky-high inflation and decades of economic mismanagement have turned it into a graveyard for multinational consumer goods companies.
The naira has swung wildly in recent months and is down against the dollar over the past year, the most of any African currency. That’s made it difficult for companies that import goods and service foreign debts to make a profit as they struggle to pass the necessary price increases to consumers. And while the central bank has now cleared a $7bn backlog that companies were seeking to repatriate the difficulty in doing so in recent years made many businesses unsustainable.
The gaps in the market left by the departing multinationals present an opportunity for domestic companies and foreign firms that focus on sourcing raw materials in Nigeria and manufacturing locally, thereby avoiding the currency risk that has hounded some foreign companies out.
And while the departures show just how unattractive the Nigerian consumer market has become they also highlight the success of strategies of companies such as Hayat and Tolaram, which have each turned their brands into household names.
For companies such as Tolaram, used to operating in challenging environments such as Indonesia, the answer has been to localize as many costs as possible. That’s helped it turn Indomie instant noodles into one of Nigeria’s most popular brands and led it into joint ventures with US cereal and snack maker Kellanova and Danish dairy giant, Arla Foods.
“Brands can’t continue to operate the way they’re used to. You need to adapt to the market accordingly,” said an executive director at Tolaram, Girish Sharma.
“There is hardly anything in Indomie that we import. We have our own flour milling, we have our own palm oil refining, we have our packaging,” he disclosed.
Tolaram operates 24 “fully backwardly integrated” plants in Nigeria, meaning the company produces the raw materials they need and is even setting up its oil palm plantations, Sharma said in an earlier interview. GSK, by contrast, imported its products
That doesn’t mean that local firms aren’t struggling.
“In theory, we think we can better manage the difficulties of doing business in Nigeria,” said Jide Ogundare, managing director of MBO Capital Management Ltd, which took over supermarkets run by Shoprite Holdings Ltd. when the South African company quit Nigeria in 2021. “In actual fact, we face the same challenges as the foreigners except that we can’t leave and go elsewhere.”
Still, despite the narrowing margins and reduced spending power, the weaker naira is making Nigerian manufacturing competitive.
“We’re exporting to some West African countries like Mali and East Africa and our target is to export to another five to 10 countries by the end of next year,” said Imokha Ayebae, Fidson’s executive director.
The exodus of firms including Kimberly-Clark Corp., Sanofi SA and Bayer AG is hindering Nigerian President Tinubu’s bid to breathe life into the struggling economy.
Microsoft Corp. in May said it would shut the engineering section of its Africa Development Center in Nigeria two years after it opened. Meanwhile, oil majors Shell Plc, Exxon Mobil Corp. and Eni SpA have all sold their onshore operations to local companies, denting confidence in the industry that accounts for most of Nigeria’s exports and leaving behind decades of environmental devastation.
By contrast, Tinubu’s spokesman said Tolaram’s $70mpurchase of the Guinness stake was a vote of confidence in the Nigerian economy.
“The multi-pronged reforms and interventions being implemented on the economic and financial fronts would deliver sustained growth and enduring profitability,” Bayo Onanuga, special adviser to the president on information and strategy, said in a post on X.
For now, the companies still invested aren’t seeing that uptick. South Africa’s Multichoice Group, the biggest satellite television provider in Nigeria, saw subscriber numbers fall 18 per cent in the year to March saying that Nigerian customers “had to prioritise basic necessities over entertainment.”
Revenue at Johannesburg-based MTN Group Ltd., which runs Nigeria’s biggest mobile phone network, fell 53 per cent in the first quarter of the year when measured in its home currency
But there is also opportunity in challenging environments, said Tolaram’s Sharma, who emphasised the company’s belief in Nigeria’s potential.
“If everything was good I don’t think Guinness would think of partnering with Tolaram. Now when they saw there’s adversity they chose to partner with us,” he said. “Nigeria has 200 million people. They have to eat, they have to drink. We don’t see why Nigeria should not be the country where we’ll continue to stay and continue to invest.”
Speaking on the deal, the Board Chair of Guinness Nigeria, Omobola Johnson, said, “Today’s announcement represents a significant opportunity for the next phase of growth for Guinness Nigeria. This partnership brings together Tolaram’s deep expertise in manufacturing and distribution, and Diageo’s exceptional capabilities in brand building and innovation. I believe this is a winning combination which leaves Guinness Nigeria extremely well placed to drive further growth in this market.”
Managing Director/Chief Executive Officer, Guinness Nigeria, Adebayo Alli, added, “Today’s announcement marks an exciting moment for Guinness Nigeria, our employees and our customers. I look forward to working alongside Tolaram, which is one of the largest and most respected consumer goods companies in Africa, and I am pleased to note Tolaram’s alignment with Guinness Nigeria’s values and its strong commitment to building an enduring and sustainable business.”
The Managing Director of Tolaram Africa, Haresh Aswani, in his comments also expressed excitement at the deal.
“We are thrilled to welcome Guinness Nigeria, a company with such a rich legacy and strong consumer loyalty, into our ecosystem. This strategic move will expand our significant footprint in the Nigerian market and presents an opportunity to leverage our combined strengths to foster innovation and deliver immense value to our customers and shareholders across the nation,” he said.
By Gloria Ikibah
The European Union (EU) Delegation to Nigeria and ECOWAS has dismissed as fraudulent a document circulating online which claims that the EU and the World Bank are offering compensation to victims of alleged funds trapped in banks across West Africa.
In a statement issued on Tuesday in Abuja, the delegation described the document as a scam and urged members of the public to ignore it.
According to the EU, the fake document falsely claimed to have originated from the Secretary General of the Council of the European Union, Ms Thérèse Blanchet, and announced a non-existent EU-World Bank assisted recovery programme for people allegedly affected by fraudulent fund transfers in Africa.
The document also claimed that citizens from Europe and other countries whose legally transferred funds were trapped in banks and financial institutions across West Africa were eligible for compensation. It further alleged that the EU Ambassador to Nigeria and ECOWAS had been mandated to oversee the compensation process and encouraged potential beneficiaries to contact him.
Rejecting the claims, the delegation stated:
“This document in its entirety is a scam. The information and claims contained therein are false. The European Union is neither aware of any such bogus programme nor part of it.”
The delegation further disclosed that the contact details contained in the fraudulent document were fabricated by the perpetrators.
“The email addresses and phone number provided in the document as those of Ms Blanchet and Ambassador Mignot are fake, and obviously belong to the scammers.”
The EU urged members of the public to remain vigilant and avoid engaging with individuals behind the scheme.
“The Delegation of the European Union to Nigeria and ECOWAS urges members of the public to disregard the fake information. The Delegation’s website and social media platforms remain the Delegation’s official channels of communication to the public”, the statement read.
The delegation advised anyone seeking information on EU programmes or activities to rely only on its verified communication channels, warning that fraudsters increasingly exploit the names of international organisations to deceive unsuspecting members of the public.
The Nigerian National Petroleum Company Limited, NNPCL, has increased the pump price of Premium Motor Spirit, PMS at its retail outlets for the second time in less than 48hours.
According to a market survey by DAILY POST showed that NNPCL raised its petrol price to N1,335 per litre on Wednesday from N1,270 per litre on Tuesday.
This means that the state-owned filling station increased its fuel price by N65 per litre.
The new price has been implemented at NNPCL filling stations in Wuse Zone 6 (Berger), Zone 4, and other outlets in Abuja and its environs.
Recall that on Tuesday, NNPCL increased its petrol pump price by N115 per litre to N1,270 per litre.
The latest increase comes amid continued petrol price volatility in the country’s downstream oil sector following Dangote Refinery’s resumption of the sale of refined petroleum products in U.S. dollars.
Daily Post
By Gloria Ikibah
The House of Representatives has called for the development of a National Drone Industrialisation Policy aimed at strengthening Nigeria’s indigenous defence manufacturing capacity and improving the country’s ability to respond to rising security threats.
The lawmakers also urged the Federal Government to provide targeted financial support to local drone manufacturers, including Beirech UAS, Terra Industries, Elites Group, Pro-force and the Air Force Institute of Technology (AFIT), through the Bank of Industry, the Defence Industries Corporation of Nigeria (DICON) and other financing platforms to help them expand production and meet military procurement standards.
The resolution was sequel to the adoption of a motion sponsored by Rep. Ademorin Kuye on Wednesday during plenary.
Nigeria has continued to battle terrorism, banditry, kidnapping, oil theft and other forms of violent crime, prompting increasing calls for the deployment of advanced technology to support military and security operations. Globally, unmanned aerial vehicles (UAVs), commonly known as drones, have become indispensable tools for intelligence gathering, surveillance, reconnaissance and precision operations. In recent years, security experts have also warned that non-state actors, including terrorist organisations, are increasingly deploying commercial drones during attacks, underscoring the need for Nigeria to strengthen its domestic production capacity.
Debating the motion, Rep. Kuye said the country’s worsening security situation had placed enormous pressure on the Armed Forces and other security agencies.
He noted that drones have become vital assets in modern military operations, adding that terrorist groups such as Boko Haram and the Islamic State West Africa Province (ISWAP) have already incorporated commercial drones into their operations against Nigerian troops.
The lawmaker, however, said Nigeria has made notable progress in indigenous drone development, pointing to the successful production of the Tsaigumi Unmanned Aerial Vehicle by the Air Force Institute of Technology in 2018 as evidence of the country’s growing technological capability.
He argued that Nigeria possesses the resources needed to become Africa’s leading drone technology hub if supported by deliberate government policies.
He said: “The House is concerned that Nigeria, with a pool of engineering talent, a growing technology entrepreneurship ecosystem, existing military-industrial partnerships and the largest economy in Africa, possesses the foundational conditions to become the hub for drone technology, provided there is structured government policy, capital and legislative support.”
Kuye expressed concern that despite the country’s potential, local drone manufacturing remains largely driven by private investors who face limited access to financing, inadequate government support and weak technology transfer arrangements.
Following the adoption of the motion, the House mandated its Committees on Defence; National Security and Intelligence; Science and Technology; and Industry and Commerce to develop a comprehensive National Drone Industrialisation Policy that would serve as a roadmap for transforming Nigeria’s drone manufacturing sector into a strategic, government-backed industry.
Lawmakers also directed the Committees on Defence and National Security and Intelligence to work with the military and relevant government agencies to negotiate technology transfer agreements with reputable international drone manufacturers. The proposed agreements are expected to facilitate the training of Nigerian engineers, encourage local production and gradually reduce the country’s dependence on imported drone components.
The House further tasked its Committees on Defence; Industry and Commerce to collaborate with relevant agencies in establishing specialised Defence Industrial Zones dedicated to drone manufacturing, research and maintenance. The zones are expected to benefit from fiscal incentives, improved infrastructure and supportive regulatory frameworks capable of attracting both local and foreign investors.
The house unanimously adopted the motion and mandated its Committees on Defence; National Security and Intelligence; Industry and Commerce; Air Force; and Science and Technology to review existing laws governing defence procurement, local content, aviation and investment incentives with a view to introducing amendments that would promote drone industrialisation, including tax incentives and stronger protection for intellectual property developed by Nigerian innovators.
The committees were given four weeks to submit their report for further legislative consideration.
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