Nigerian Coca-Cola Bottler to Expand Plants, Offer New Products

Nigerian Bottling Co., which bottles Coca-Cola products in Africa’s most populous nation, will expand existing plants and introduce new products to cater for changing tastes, Chief Executive Officer Jim Lafferty said.

To fund the expansion, NBC will choose from a “range of options including loans and self-financing,” the 46-year-old who took over as CEO on Feb. 1 said in an interview yesterday. He declined to provide details on NBC’s expansion plans.

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Nigeria vies with Angola as Africa’s biggest oil producer, and currently ranks as the fifth-biggest exporter of crude oil to the U.S. A census in 2006 put the country’s population at 140 million people. Nigeria’s $147 billion economy, the continent’s second-biggest, is expected to expand 6 percent this year, the same pace as last year, according to Citibank.

Lafferty joined NBC from Procter and Gamble Co., where he spent 24 years working on four continents, his last posting being president and general manager for the Cincinnati-based company’s operations in the Philippines.

Nigeria represents one of the “last frontiers of global business,” Lafferty said, adding that he was drawn to the West African nation because of how different the country was to the reports he had read about it.

“The fundamentals are there for Nigeria to be one of the great success stories for the next 50 years,” he said.

Coca-Cola

NBC is a unit of Coca-Cola Hellenic Bottling Co., the world’s second-biggest bottler of Coca-Cola beverages, after Coca-Cola Enterprises Inc. The company employs 6,000 people, operating 13 bottling plants, 80 depots and more than 200,000 sales outlets in Nigeria, according to NBC’s Web site. It offers brands including Coca-Cola, Diet Coke, Sprite and Fanta.

“If you look at the portfolio of products that NBC has today and the portfolio of products in a developed country, there are a lot of potential opportunities,” Lafferty said. “You will see a number of exciting new expansions in categories in the coming years to meet the growing needs of the Nigerian consumers.”

Coca-Cola Nigeria Limited, the domestic unit of Atlanta- based Coca-Cola Co., last August closed its concentrate plant in Nigeria, a move that many Nigerians interpreted as part of a plan by NBC to relocate from the country. Lafferty said NBC has no plans to move, adding that the relocation of the plant to Swaziland was part of Coca-Cola’s rationalization exercise. NBC now imports concentrate from the southern African nation.

NBC’s operations in Nigeria face constraints imposed by inadequate infrastructure, the large size of the country and recurring civil unrest, Lafferty said.
Infrastructure Concerns

Dilapidated roads impede movement of products and unreliable power supplies can disrupt operations, Lafferty said. Blackouts are a daily occurrence in Nigeria, where demand for electricity is almost double current supply. Last year, the country failed to achieve a target of generating 6,000 megawatts of electricity by the end of 2009.

Civil disturbances, including religious violence, have also become more frequent in Nigeria. About 500 people were killed on March 7 in the central state of Plateau. Similar violence in January led to the deaths of more than 300 people.
NBC will work “around” these problems to achieve its targets, said Lafferty.
–Editors: Paul Richardson, Ana Monteiro.
To contact the reporter on this story: Vincent Nwanma in Lagos via Johannesburg at [email protected].
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at [email protected]

http://www.businessweek.com/news/2010-03-10/nigerian-coca-cola-bottler-to-expand-plants-offer-new-products.html