Business shutdown: FX losses, rising OpEx threaten real sector’s survival

announced that it is suspending operations in two of its nine breweries.AS FMCG firms become the latest casualty to the country’s worsening business environment, stakeholders are worried about the fate of local industries, fearing that if nothing is done quickly to stem business closure, the future of manufacturing is endangered, TOBI AWODIPE reports.

Last month, the Manufacturers Association of Nigeria revealed that 767 manufacturing companies shut down operations, 335 are distressed, while inventory of unsold finished goods stood at N350 billion. The association also revealed that the sector continued to record a real growth drop and needed urgent intervention to stay alive.

Other companies that recorded FX-related losses in 2023 include, Nestle Nigeria, N173.92 billion; Nigerian Breweries, N153.33 billion; NASCON Allied, N8.54 billion; BUA Cement, N69.95 billion; Lafarge Africa, N 21billion; Guinness Nigeria, N49.1 billion; Dangote Cement, N164.07 billion; BUA Foods, N73.56 billion; Dangote Sugar, N148.33 billion; Okomu Oil, N0.21 billion; Notore Chemical, N5.59 billion; Vitafoam Nigeria, N0.103 billion; Beta Glass, N0.98 billion and Unilever N6.94 billion.

“Prices of goods are also going up every day, the elasticity of demand is high and it is telling on industries like the breweries. It is not easy to transfer costs to consumers because they are also aware that affordability is an issue and when they can no longer absorb the damage on profit margins that is when they increase prices. Margin has now become so eroded that they must look for how to cut costs one way or the other.

While noting that these problems are not peculiar to FMCGs and manufacturers alone, he urged the government to bring down inflation, create more jobs and fix the economy, he said this is the only way to save the sector from imminent collapse. “When people are gainfully employed and resources are available, there will be more disposable income for things. You cannot expect someone who has no job and has not eaten to use whatever resource is available on non-essentials.

“The recent destructive electricity tariff hike could be the final straw for a lot of companies. I am afraid that if nothing is done very soon, many manufacturing plants in Nigeria will eventually shut down. This will result in higher unemployment levels, increased insecurity and lower revenues for the government. Insecurity is at an all-time high, stemming from unemployment and this affects the real sector.

Calling on the Federal Government to help manufacturers access funds easily at lower interest rates, he said a long-term positive change is needed in stabilising the naira. “We need to improve exports, cut down on imports and permanently address the issue of naira depreciation”, he said.Before flagging, please keep in mind that Disqus does not moderate communities. Your username will be shown to the moderator, so you should only flag this comment for one of the reasons listed above.

Portugal Últimas Notícias, Portugal Manchetes

Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.

Business Insurance: How to Protect Your Business From Risks and Liabilities in NigeriaSafeguard your business in Nigeria from unforeseen risks and liabilities with our comprehensive guide to business insurance. Learn about the essential coverage options that can shield your enterprise, the process of selecting the right insurance policies, and the benefits of a well-protected business.
Fonte: TODAY - 🏆 12. / 53 Consulte Mais informação »

The Value of Business Analysis for SMEsBusiness analysis is a powerful tool that can help small and medium-sized enterprises (SMEs) streamline operations, maximize resources, and achieve sustainable growth. By examining an organization's current state, identifying areas for improvement, and recommending solutions, business analysts can bridge the gap between business stakeholders and technical teams to align technology with business needs. This article highlights the value proposition of business analysis for SMEs and explores real-world scenarios where it can significantly benefit Nigerian SMEs.
Fonte: TheNationNews - 🏆 6. / 69 Consulte Mais informação »

Ashafa commends Mezovest for empowering female entrepreneurs in gas retail businessThe Nation Newspaper Ashafa commends Mezovest for empowering female entrepreneurs in gas retail business
Fonte: TheNationNews - 🏆 6. / 69 Consulte Mais informação »

Kano business community faults Anchor Borrowers’ Scheme, wants interventions streamlinedThe Latest news in Nigeria and world news. The Guardian Nigeria Newspaper brings you the latest headlines, opinions, political news, business reports and international news.
Fonte: GuardianNigeria - 🏆 1. / 94 Consulte Mais informação »

Korede Bello: ‘Minding My Business, Sharing Happiness Is Priority’Barely three weeks ago, Korede Bello returned with a two-track release, one of which was the Minding My Business duet with his former label boss, Don Jazzy.
Fonte: GuardianNigeria - 🏆 1. / 94 Consulte Mais informação »

Kaduna to enforce forest laws, tackle charcoal businessNigeria's independent online newspaper
Fonte: thecableng - 🏆 2. / 80 Consulte Mais informação »