COCA-COLA HELLENIC WILL INVEST MORE TO BOOST OPERATION IN NIGERIA- APATA

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In this interview, Board Chairman, Nigerian Bottling Company (NBC) Limited, Amb. Segun Apata, speaks on the company’s activity in Nigeria in 70 years, the $1.7 billion investment in Nigeria in 10 years by its Parent Company, Coca-Cola Hellenic and other topical issues. Excerpts:

Let’s begin by understanding your journey to the Nigerian Bottling Company (NBC) Limited, after so many years in the public service, could you briefly talk through your switch to the private sector?

We must view Nigeria from two operating sides – the private and public sectors – which must work together for the prosperity of the country, just like the Coca-Cola System in Nigeria comprising of Nigerian Bottling Company Ltd and Coca-Cola Nigeria Ltd are working together seamlessly. I joined the Nigerian Foreign Service as the first set of the second decade of Nigeria’s independence, and the first set after the Nigerian Civil War. It was an opportunity to interact and interface with actors both in the private and public sectors within and outside the country.

Incidentally, my first assignment abroad was in Dublin, Ireland where the Charge d’Affaires assigned me the responsibility of fostering economic relations between Ireland and Nigeria. One of the highlights of my tour of duty in Dublin was the visit of a Nigerian Economic and Trade Delegation led by the then Chairman of the Nigerian Chamber of Commerce and Industry, the late Chief Henry Fajemirokun. A number of investment deals and joint ventures were struck during the visit.

The goodwill and high regard the Irish had for Nigeria was manifested in the high-level reception accorded the delegation by both Irish Governmental leaders and the top leaders of the Irish private sector. The visit was essentially the beginning of rapport between the leadership of Irish Confederation of Industries and the Nigerian business Community. I hope the foundation laid has been sustained over time.

On leaving the Nigerian Foreign Service, I was invited to join the Board of Nigerian Bottling Company (NBC) Ltd. I saw it as opportunity of continuing the journey of attracting foreign investment into the country. And Coca-Cola as perhaps the most recognised Brand in the world provides one the platform to interface with existing, current and potential investors. Did I hesitate when invited? Oh no. Who wouldn’t want to be part of the most famous brands in the world? I hope you remember that Coca-Cola is it.

As an ambassador, which other foreign missions did you serve?

I didn’t start out my career as an ambassador. I had to climb the ladder, just like it obtains in the corporate world. As I already mentioned, the starting point in terms of foreign assignment was Dublin, Ireland and the last assignment was as one of the Representatives of Nigeria to the United Nations in New York.

In between, I served in a couple of countries including Greece and was privileged to serve as Nigeria’s Ambassador to Zaire under President Mobutu. I must acknowledge that the Nigerian Foreign Service at my time had the largest pool of talents in the Nigerian Public Service; and I was extremely fortunate to work and interact with many of them including some of the Twelve Apostles – the pioneer of the Nigerian Foreign Service.

How do you feel being a part of a global brand, which with its 70 years of existence in Nigeria has built a culture of excellence?

We are lucky as a company to have travelled this journey of 70 years. Perhaps, we should cast our minds back and ask – how many companies, whether family founded companies or multinationals, which operated in pre-independence Nigeria are still in existence till today? We are one of the very few that have survived different phases of Nigeria’s political and economic history.

The credit goes to our founder – A.G Leventis and the Leventis Family who have consistently and unflinchingly remained committed to the country. The journey which AG Leventis began in 1951 as the Coca-Cola bottler for Nigeria with its first manufacturing plant in the basement of Mainland Hotel Ebute Meta is what we are celebrating this year.

In 70 years, we have expanded the business in all facets – the product range, as well as, all packaging types. Currently, we are the only manufacturer with hot-fill line in the country. What is most impressive is the US$ 1.7 billion investment that our Parent Company, Coca-Cola Hellenic poured into the country in last ten years (2011-2021.) Before the investment, that is in 2010, we produced about 180-million-unit cases; and nine years later, with the investment, we closed out 2020 with over 300-million-unit cases.

We will surely celebrate our 70th anniversary with an impressive close out in December 2021. The story is even more impressive than that – we have moved away from one line and two lines plants to huge plants in different parts of the country. The Minister of the Federal Capital Territory has just commissioned the 5th line in our Abuja Plant, which incidentally is both fastest line and the line with biggest capacity in the plant. It produces 42 thousand bottles per hour.

The same achievement has been recorded in Benin, Port Harcourt, Kano, Owerri and Asejire. We are expanding our Maiduguri Plant, which we have never closed down in spite of the challenges in that part of the country. We celebrate the fact that Our Ikeja Plant is largest Coca-Cola Plant in Africa. We will continue to invest in the country in the coming years. I like to emphasize that the investment is not just on machinery and processes but our people – the core of our business.

Yes, it is not easy doing business in Nigeria. It is a very tough and challenging environment. Ye, we remain standing despite the turbulence in our macro-economic environment. Our Leventis pedigree has a lot to do with our resilience. Of course, government policies impact businesses, and the macro-economic environment can be very tough sometimes – whether in fiscal policies or monetary policies. But here we are – patient and always engaging – because NBC and the Leventis Family are committed to the country.

NBC is for ever appreciative of the Leventis Family. Without the Family, the investments that I spoke of would have migrated elsewhere. It is important to point out that NBC is just one of the 28 countries in which our Parent Company, Coca-Cola Hellenic is doing business. All the 28 countries are always competing for investment. Besides, funds could be utilized by our Parent Company to acquire other businesses or territories within the Coca-Cola System.

Interestingly, Coca-Cola Hellenic has just acquired the Coca-Cola Bottling business in Egypt. With acquisition, Egypt joins Nigeria as the second African country within the Coca-Cola Hellenic Group.

When you came on board, one of the targets before you was to make NBC the foremost bottler in Africa. Looking back now, how far have you gone with that agenda?

The transformation of the NBC in the last ten years has been phenomenal. The credit goes to the Board of Directors, the Management and staff of the Company and indeed to all our Distributors and outlets. Credit must equally go to the Board and Operating Committee of our Parent Company – Coca-Cola Hellenic with its Head office in Zug, Switzerland – they have and continue to show robust interest and understanding for the business in Nigeria. It is important to mention that the origin of Coca-Cola Hellenic is Nigeria.

It is from this country that the Leventis Family expanded the business to 27 other countries (and 28 with Egypt) including Greece, Ireland, Cyprus, Russia, Italy and Ukraine etc. Again, we are very proud that our plant in Ikeja is the largest Coca-Cola plant in Africa. And we are not done yet. Further expansion is on the horizon. Don’t be surprised that in a few years, other Plants in the country may surpass Ikeja as we are currently executing expansion in a number of plants across the country.

When you talked about the expansion of your production lines, that is a reflection of your investment in Nigeria. NBC has invested heavily in Nigeria for the past 70 years; let’s look at the past 10 to 20 years, can you talk us through your investments and the impact over these years?

As I mentioned previously, we are fortunate that our Parent Company, Coca-Cola Hellenic Bottling Company and the Leventis Family are committed to Nigeria. We are equally fortunate that the only African on the Board of our Parent Company is a Nigerian – Mrs Sola David-Borha. The icing on the cake for us in NBC is that a member of our Board in Nigeria also serves on the Board of our Parent Company.

I am referring to Mr A.I Leventis. His dual role on both Boards provides a veritable platform for the Board and the Executive Leadership of our Parent Company to have clear understanding of the business in Nigeria. We are appreciative of his special interest in the country.

I have already averred to the 1.7 billion United States dollars since I joined the Board, as well as our commitment to expand our production across the country – all range of products – water, carbonated drinks, juices etc, in the coming years. With logistics being very tough in Nigeria, we plan to increase the production capacity of our plants in Port Harcourt, Benin, Owerri, Kano, Abuja, Asejire; and over time match Ikeja. As I already mentioned, Maiduguri is special.

The expansion of Maiduguri commenced three years ago, and we are poised to accelerate it. We are the only manufacturer in Maiduguri which has never closed its operations. Doesn’t NBC honestly deserve special recognition and indeed special award by both the Federal Government and Borno State Government?

We are pleased to hear about your investment plans in Nigeria, both in logistics and expansion of your manufacturing. Now, The Coca-Cola System expanded by buying into Chi Limited (i.e., Chivita). And I know that since you said your manufacturing plant produces the range of products, Coca-Cola has more brands globally which it intends to bring into Nigeria to commence production here. So, when you invested into Chivita, what was the intention, and what is the impact now?

A clarification is necessary here. It is not NBC that invested in Chivita. It is The Coca-Cola Company. Further clarification may be helpful. The Coca-Cola System is like a coin with two sides. Coca-Cola Nigeria Ltd is the company that acquired Chivita and it is directly operating Chivita.

As a System, both NBC and Chivita continue to refresh Nigeria with its products – Coca-Cola, Five Alive, Sprite, Fanta, all range of Schweppes products including the newly introduced Zobo and Ginger – the essence is to give all our consumers choices.

In talking about investing in logistics, and with Nigeria being difficult in that area, how are you managing security when it comes to your logistics, and the roads too, in terms of infrastructure problems?

What we have done in large measures as a business is that we have to view the impact of the business on the whole environment. There are many huge businesses that depend on us for survival. For instance, the trucking business -many trucking companies are third party service providers to NBC.

Remember that we manufacture in 8 Plants. A number of companies, some of them with 15-20 tractor-tailers cart products from our Plants to all parts of the country. – for example, Asejire to Ilorin, Asejire to Oka; Abuja to Minna, Abuja to Makurdi and Jos; or Kano to Sokoto, Kano etc.

Besides, there are major Distributors of Products across the country with huge warehouses and 2-5 delivery vans -delivering products to outlets across the country including the Mama selling suya and boli. There are many other businesses directly anchored and tied to our Coca-Cola business, such as the companies supplying us sugar, glass bottles, crowns, plastic containers etc. It is a complete value chain across the country.

Hence, when something affects even the woman selling boli along the roadside with a crate of Coke by her side, it affects us because without such people our products cannot be accessible to everyone in the country. Undoubtedly the security situation in the country imposes huge challenges on us as a manufacturer and on our distributors and outlets across the country.

Let’s touch on the area of CSR. What has the company done to justify its bond with the society?

Over the years and in recent times, CSR has been taken to another level. People want to be part of brands that contribute to society. We are very proud of the way we contribute to our communities. Our presence in the smallest villages within the country makes a difference, because we are very sensitive to the needs of our communities.

Let me cite the ‘Lady Mechanic Initiative’ – I was excited at the idea of the ladies becoming auto mechanics. NBC leadership was very passionate in supporting the initiative and with that single project, there are now several lady auto mechanics in the country. May I suggest that you find some time to have a conversation with Sandra, the first lady mechanic in Nigeria.

You’ll wonder why I am emphasizing the Lady Mechanic initiative. I am passionate about our women as many of our Distributors and outlets are women. Nigerian women are very versatile entrepreneurs – they get to their business locations as early as 6am and are there till around 9pm. Is this not impressive?

Then we had the Youth Empowerment program across the nation – training our youths in different skills. We have reached over 30,000 young people in the last 5 years – assisting to train them on how to make paint, shoe making and simple manufacture of everyday products etc. We assisted in the renovation and construction of a number of classrooms across the country.

The Safe Birth Initiative aimed at reducing the infant and maternal mortality rate in Nigeria is another CSR we are very proud of. All these initiatives are not only making impact in the communities but positively improving the lives of our people.

Does NBC just embark on initiatives as they come up or is it focused on specific areas?

It is structured in line with the needs of our communities. We are sensitive to the women and the youth who are the backbone of the economy. Our focus on sustainability in our communities includes, water and environmental stewardship, education, health, youth, and women empowerment. When COVID-19 struck, we were one of the first companies that contributed to the national effort at combating the virus.

We donated masks and other PPEs to our health workers in the COVID-19 Isolation Centres. We also took the initiative of reaching out to vulnerable people in our communities with household essentials. Even when life began to return to normalcy post-lockdown, we took decisive steps to support many people in our communities to regain their feet. Our interventions have always been driven by the needs of our communities.

The beverage industry today is a competitive space and can be a challenging one. What is your view?

We are never afraid of competition. In fact, we welcome competition, but on a level playing field, where all of us in the marketplace face the same parameters – whether in terms of monetary policy, fiscal policy, or a question of approvals in a fast-tracked manner. There should be level playing field to encourage competition.

NBC is obviously part of a global network of the Coca-Cola System. Coming home to Nigeria, how has NBC borrowed from technological advancements abroad in their operations, considering that Nigeria is underdeveloped in this area?

The world is changing rapidly. It is obvious that innovation, adaptability, and creativity are what will drive any business. Comparing the lines we used to manufacture our products 70 years ago with those of today, the lines of 70 years ago would only be fit for the museum. The machinery and equipment we use to produce our products are not manufactured in Nigeria.

We purchase the lines from abroad. We often run into turbulence accessing the foreign exchange to purchase these lines. This slows down the pace of our investment and by implication our capacity to employ people. It equally impacts others who are dependent on us in our value chain to earn a living. Yes, we have a well-established system where the manufacturers of the lines physically train our people in our plants.

And when necessary, we embed our staff members with the manufacturers of the equipment to acquire the skills of maintaining the equipment. Consequently, we have a pool of very knowledgeable and skilful people who manage these equipment. We also train our staff in other Coca-Cola Hellenic countries.

Some years ago, NBC delisted from the Nigerian Stock Exchange (NSE). What informed that decision? What was the objective? And how has it impacted on operations?

As I’ve mentioned earlier on, we are part of a multinational that has operations in 28 countries. Nigeria was the only subsidiary listed in the local Stock Exchange at the time. The subsidiaries in Russia, Poland, Greece, Ukraine, Switzerland etc were not listed in the local exchanges. But our parent company, Coca-Cola Hellenic is listed in the London Exchange. The major drawback of local listing was that it was a negative in attracting investment from our parent company.

Essentially the decision of the Board to restructure its shareholding was driven by the desire to accelerate investment in our operations in the country. The US$1.7 billion we spoke about earlier and our future investment plans validate the decision of the Board. It’s worth recalling that the Scheme of Arrangement was approved with over 95% at the court ordered meeting.

Let’s talk about the environment. Looking at the products you manufacture, how are you involved in sustainability and being eco-friendly?

The Coca-Cola Company and all its bottlers have championed and continue to champion sustainability as our overriding objective. We need to thrive in a sustainable environment, whether in the use of energy and water.

With regard to plastics, we are part of the Food & Beverage Recycling Alliance (FBRA) – where we play a major role. There are many companies now collecting these plastics and recycling them for other uses. We will continue to use plastics, but we are also focused on sustainable use of plastics

How do you take consumer health consciousness into consideration, in terms of sugar consumption?

The beauty about The Coca-Cola Company is that we have a wide range of products to cater for all sorts of taste. We are strong believers that the power of choice belongs to the consumers. Specifically, on sugar, The Coca-Cola Company has great formulations with low or zero sugar.

I’m sure you have seen many of them, for example, the Coke Zero. The right of choice absolutely belongs to the consumers – to select whatever product they want from the range of products in the marketplace.

How would you describe your tenure, your glorious moments since your chairmanship, as well as your challenging times?

The Board is proud of what NBC has been able to achieve in the past 10 years. And I stated earlier on the credit goes to the Board of Directors, the Management and the Leventis Family.

We are extremely fortunate that the current generation (third generation) of Leventis Family continues to have an abiding interest in Nigeria. It will utterly be remiss of me if I do not use this occasion of our 70th anniversary to salute the Leventis Family.

On a final note: moving forward, what do we expect from the NBC family?

Based on the journey, which began 70 years in a small plant Mainland Hotel premises to where we are today -with a mega Plant in Ikeja, we’ll surely become one of the major Coca-Cola Bottlers on continent. Although South Africa has a smaller population than Nigeria, it produces over a billion-unit cases. So, we still have a journey to travel.

With the investment we are planning to execute, and if there is no tsunami in the macro-economic landscape, we should move closer to South Africa in terms of volume before long. We ae lucky to have an awesome management team. Nigeria and Nigerians will remain at the heart of our business; and we will continue to invest in our people, the environment and the economy.

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