- Title: NIGERIA: Nestle Nigeria to reach into villages to grow business
- Date: 20th May 2014
- Summary: LAGOS, NIGERIA (RECENT) (REUTERS) VARIOUS EXTERIOR OF NESTLE FACTORY STACKED CARTONS VARIOUS OF "GOLDEN MORN" CEREAL ON PROCESSING LINE CARTONS ROLLING ON A MACHINE VARIOUS OF MAN STACKING CARTONS OF "GOLDEN MORN" CEREAL STACKED CARTONS OF NESTLE PRODUCTS CARTONS READING: "NESCAFE" NESTLE CEO DHARNESH GORDHON DISCUSSING WITH A REPORTER BALL READING: "NESTLE MILO" (SOUNDBITE) (English) DHARNESH GORDHON, MANAGING DIRECTOR, NESTLE NIGERIA PLC, SAYING: "Over many years we have managed to build a formidable sales structure and route to market. Ideally the strength of that is really finding local partners and local partners I mean, local Nigerian distributors who have their own businesses across the spectrum, so today we have over 70 distributors who we consider to be partners and together we invest in improving the skills, so we do a lot of training, a lot of development, we bring new sales tools to assist them, we teach good practices in terms of distribution, in terms of warehousing so our model is really .... find appropriate partners who can assist us in getting products to the end consumer in a more efficient way." VARIOUS OF WORKERS PACKAGING "MAGGI" SEASONING IN CARTONS VARIOUS OF "MAGGI" SEASONING GOING THROUGH A COUNTING MACHINE VARIOUS OF WORKERS PACKAGING "MILO" BEVERAGE SATCHETS (SOUNDBITE) (English) DHARNESH GORDHON, MANAGING DIRECTOR, NESTLE NIGERIA PLC, SAYING: "If you think about the challenges every business has, it's containing operating cost and becoming more efficient, becoming smarter at the way you procure raw materials, driving efficiency in manufacturing is certainly the strategy because at the end of the day, the consumer will not pay for our waste and the more inefficient we are, it means that we have another option of what is in existing price and this is not what we believe and we believe that consumers seek value and one of the ways we will deliver value in addition to doing things right in terms of the nutrition, in terms of having healthier tastier choices is to drive down cost which means you can offer consumers better value at more competitive pricing." WIDE OF "NESTLE" BOTTLED WATER FACTORY VARIOUS OF BOTTLED WATER MOVING ON MACHINE / WORKER ARRANGING BOTTLES
- Embargoed: 4th June 2014 13:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: Industry
- Reuters ID: LVAM9W794C8CF85V4DWYIMFQWE
- Story Text: Giant food producer Nestle PLC is to invest 70 million dollars in its local unit in Nigeria to grow the business this year.
Founded in 1961 and headquartered in Lagos, Nestle operates two divisions, food and beverages.
They also market and distribute their products in Nigeria, from which it exports to other parts of Africa.
It offers infant formula, cereals, beverage drinks, confectionery, seasoning, water, and full cream milk.
Dharnesh Gordhon, managing director, Nestle Nigeria says the company has invested 400 million US dollars in the past six years into its food and cereal business.
Nestle plans to expand its distribution network with up to 2,000 low-cost vans to tap into the mass consumer market of Africa's biggest economy.
Already, 10 mobile vans have been launched in Nigeria's commercial capital this year as part of efforts to widen its distribution base with efforts to also use Nigeria's booming internet retailers to develop online sales capacity.
This is in its quest to join the retail business to reach the end consumer in a more efficient way.
The mobile vans would be stationed at housing estates and colleges with large populations and little retail presence.
"Over many years we have managed to build a formidable sales structure and route to market. Ideally the strength of that is really finding local partners and local partners I mean, local Nigerian distributors who have their own businesses across the spectrum, so today we have over 70 distributors who we consider to be partners and together we invest in improving the skills, so we do a lot of training, a lot of development, we bring new sales tools to assist them, we teach good practices in terms of distribution, in terms of warehousing so our model is really .... find appropriate partners who can assist us in getting products to the end consumer in a more efficient way," says Gordhon.
Nestle's seasoning product, Maggi, reaches 20 million Nigerian consumers every year and it is aiming to attract more through the mobile vans by growing into towns and villages.
The plan is to triple annual sales in Nigeria to 350 billion naira (2.2 billion US dollars) over the next ten years so as to meet their targets, which Gordhon said are on track.
Recently, a flat first-quarter pretax profit of 7.07 billion naira, sent its shares down 3.70 percent to 1,040 naira.
This flat profit was due to higher marketing and sales costs, which grew 7 to 8 percent during the period, owing to the firm's growing distribution channel and branding.
"If you think about the challenges every business has, it's containing operating cost and becoming more efficient, becoming smarter at the way you procure raw materials, driving efficiency in manufacturing is certainly the strategy because at the end of the day, the consumer will not pay for our waste and the more inefficient we are, it means that we have another option of what is in existing price and this is not what we believe and we believe that consumers seek value and one of the ways we will deliver value in addition to doing things right in terms of the nutrition, in terms of having healthier tastier choices is to drive down cost which means you can offer consumers better value at more competitive pricing," said Gordhon.
Nestle is also investing 25 million US dollars this year to double its water bottling capacity in Nigeria to 200,000 litres, as it tries to meet growing demand in the north of the country and expand its 6 percent market share. - Copyright Holder: REUTERS
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