Heineken looks-on with keen interest amid currency turmoil in Nigeria
Heineken is observing with keen interest the Naira headwinds, which makes it difficult for the company to take money out of the country.
A spokesperson for Heineken, said that currency repatriation in Nigeria, the company’s second biggest by profit contribution, was getting “more difficult but is not impossible.”
“We clearly are mindful of what is going on,” the spokesperson said.
Nigeria has been experiencing currency turmoil in the last few years, as a result of falling crude oil prices, the country’s main income earner. Earlier this week, the Naira fell to N400 to the dollar in the unofficial black market, nearly twice as much as the official rate of N197 to the dollar. The government has so far resisted devaluing the Naira further, stating that Nigeria does not have a competitive trade advantage to benefit from an official currency adjustment.
On Wednesday, the unofficial Naira exchange rate regained 50% of its lost value, to end the day at N310 to the dollar.
Heineken, which is the majority shareholder of Nigerian Breweries Plc, said it has already factored a possible devaluation into its full year 2016 estimates.
The Heineken spokesperson said: “While Nigeria is important in the overall company, we are much diversified such that our exposure to any one country is limited.”
Nigerian Breweries volumes increased slightly in 2015 according to full-year results reported earlier this month. However, the company has acknowledged that consumer tastes and demand has shifted to lower-value brands.
Heineken’s Nigerian Breweries commands a 70% market share in Nigeria.