As part of its backward integration strategy, Nigerian Breweries has partnered with local entrepreneurs and farmers to harness huge value chain.
Mr. Patrick Olowokere, the company’s Corporate Communications and Brand Public Relations Manager, explained that the company was consolidating its local sourcing of inputs for its operations and has fast-tracked its plan to attain 60 per cent local input sourcing to 2018 as against the initial 2020 target.
During a tour of Psaltry International Limited, one of Nigerian Breweries’ major raw material suppliers, in Alayide village, Ado Awaiye near Iseyin, Oyo State, Olowokere said that the strategy was to identify organizations that could produce raw materials and ancillary products as inputs for its business.
These organizations, he explained, would be supported and provided the guarantee of a ready market for their products. These value chain models, according to him, has been successfully experimented in the areas of Packaging Material, Sorghum and Cassava development models.
He revealed that the company has also made progress in increasing the supply of sorghum used for some of its beverages as more than 100,000 metric tonnes of the cereal is annually sourced locally. “Over 250,000 farmers spread across several agronomic zones in the North have been impacted by our Sorghum value chain program as at 2013” he said.
Currently the company’s brands are packaged using locally sourced packaging materials such as bottles, cans, crates, cartons, crown corks, and labels among others. As at 2016, 99 percent of these packaging materials were locally sourced, opening wide opportunity to clusters of local entrepreneurs.
Similarly, the company has since 2015, been working with Psaltry International Limited, a local cassava processing company to optimize the cassava value chain in the country by providing industrial quality cassava starch to extract maltose syrup for use in its brewing process.
The cassava processing firm, has today become the biggest revelation coming out of the backward integration story. Mrs. Oluyemisi Iranloye, MD/CEO of the firm, informed journalists last week that the firm has created a supply chain involving up to 5,000 farm families which included more than 2,000 registered and unregistered out grower farm families, marketers, transporters and retail input suppliers.
She added that the company has saved the nation more than $7million in foreign exchange in the past two years through local provision of processed cassava starch for industrial use.
Nigerian Breweries, according to Olowokere, was interested in strengthening and expanding local ancillary business activities in Nigeria, particularly in the procurement of raw materials such as starch-based inputs; and therefore identified Psaltry, as a supplier of high-quality cassava starch.
He maintained that the initiative was part of the company’s corporate philosophy of “Winning with Nigeria” and in line with the current backward integration process in the country.
The partnership between corporate giants like Nigerian Breweries and local entrepreneurs like Psaltry International Limited is also impacting socio-economic development of small scale farming communities in Nigeria. Chief Busari Amusa, Baale of Alayide, the host community of Psaltry International Limited, was full of gratitude for the new infrastructural transformation that had come to his community. “It is a dream come true. We have electricity, boreholes for water and the roads are also opening up for accessibility between our farms and the factory. My story has changed. Today, and less than two years of this cassava business, I have a new house, a car and four of my children are in higher institutions of learning. This is unbelievable,” he revealed during the tour of the community last week.