22 - V<I"guard, TUESDAY, NOVEMBER 8, 2011
BUSINESS/CAPITAL MARKET ----------~----~~--~~--~~----~--~~---------
Shareholders berate Guinness over management policies BYMICHAELEBOH
HAREH OL DERS of Guinness of Nigeria Pic have berated the company fo r its poor management practices
S
and unfriendly posture towards iiS investors. According to the shareholders at the Annual General Meeting of the company
in Lagos, Gui nness Nigeria is not properly positioned Ito benefit from the economies of scale due to its inability to sel up breweries in
strategic locations across the country and also for the excesses of its expaUiateand technical
partners . Mt. Nornah Awoh, a shareho lder of t he company and financial
analyst, chided the company over huge
amount expended on its overseas sha reho lders
and expatriate partners, calling on the company
to immediately take
steps to source some of its raw materials locally, in line with the Federal Governmen t 's local
content initiative. Guinness Nigeria, in Note 29 of its finandal s tatement lor the year ended, June 31, 2011 , titled "TI'ansactioos with related companies', said it sources certain raw materials, engineering spares and fixed assets (rom companies related to its ultimate holding company, Oiageo Pte. Accord in g to the com pany, it also pays Technical Service fees and Royalties to companjes within the Oiageo Grou p, adding
that at the year end 20 ) 1, the total amount due to other companies within the Diageo Group was N6.359 billion, co mpared to N9.043 billion in 2010. Awoh expressed concerns ove r the amount paid to the core investor in spite 01 the huge dividend acouable to the foreign investors on a yearly basis. He called on the management of the compa n y to d eve lop processes and effective policies that ensure a
reduction in the amount paid as fees to expatriates. He also reprimanded the company over th e composi ti on of its ma nagement team , saying that the presence o r only three Nigerians on the management team of the company is an affron t on the image of the country, considering the fact that they are Nigerians capable and weU-suited for the positions occ u pied by th e expatriates. Another s hareholder. Mr. Gbadebo Olalokunbo berated tbe management of th e company for their inability to increase the number of thei r breweries across tbe country, saying that the company's inability to expand to other locations will bring about a huge cost burden on it, especiaUy in the distribution o( its products across the country. He also ca Ued for a reduction in the amount owed it by debtors. Sir Sunny Nwosu, National Coord inator, In depe nde nt Sharehol d ers Association of Nigeria,
ISAN, advised the com· pany on the need to reward shareholders with bonus in the next finan· cial year, considering its huge reserves. In his response, Chairman , Guinness Nigeria, Mr. Babatunde Savage, said the company is considering ways to bring down its cost significan tly and bas undertake n a nwnber of measures that wou ld soon start yielding positive results. On the composition of its management team, be sa.id the company is integrating Nigeria ns into its leadership programme, noting that at least, three Nigerians a re currently holding chief executive positions in Guinness offices in some cou ntries while a number of Nigerians are holding key poSitions in many otber countries. Savage assured shareholders t hat the company will consider the issue of bonus and will continually promote and respect the interest of its shareholders, and a lso cont ri bute meaningfully to the growth a nd development of the Nigerian economy.
PepsiCo, Tingyi tie up in China Fn,m JeJrt, "'.fr. T-emi Olalya. NaUonal C us to mer Service Manager. DHL; Rotarian Kehlnde Oke. PresIdent. Rotary D ub, District gUO, Oregun and Mrs. DU TOWOJU Folak e, Principal. Modupe Cole Memorial OtUdcare and 'li'eatment H om e School, at the presentaUon of childcare Hems as pan of acUviUes marking DHL's Cus tomer Service Week 10 Lagos.
Nestle partners liTA, others on food security BY KUNLE KALEJAIYE
EST LE Nigeria Pte has en tered N strategic partnership
intoa
with the Internatio nal Institute or Tro pical Agriculture (!ITA), cassava farmers, a nd cassava processing industries to promote agricu ltural d evelopment and food security in N ig~ia . The partnersb.ip, ao::ording to a statement by Mt Samuel Adenekan, Corporate CommunicaliuDs and Public Affairs Manag~ Nestle Nigeria, is aimed atenruring Iong·term and sustainable commercial production of hig h quality cassava starch in N igeria. He said the project will focus o n increasing the income and food security
of the rural poor by technically supporting s mallholder farmers in target communities to increase production per unit a rea and develop effide n t marke ts for cassava. This, he said, couJd be achieved thro ugh the s ustai nab le s upply of tubers to targeted cassava s tarch production industries to enable them to satisfy NesU~'s requirements. According to him. two large-scale industries MATNA Foods Company limited in Alrure, Ondo Stateanci Nigerian Starch Mills. lID. Anambra State - will be participating in Utis value chain project, lITA will back-stop these industries by developing clusters o f farmers a nd
supplying them with cassava varieties which contain the high staICh content desired by the stan:h producer.i. He declared that the m u Iii -s t a ke ho ld e r partnership will facilitate the multiplication and dissemination of improved, h igh yielding, commercially viab le, disease resistant varieties to duster fanners and the associated industries. ''The project will also expose s mallholder farmers in target Communities to improved management practices. These will address common agronomic errors in order to increase yield per hecta.re as we ll as creating effective linkages and gua.rantee a sustainable supply of raw
materials to the cassava starch industries. " In a d dition to improving food security, the project is expected to red uce poverty and unemploymentbyadding value to cassava. These large-scaleeoterpriseswill provide a market. for the tubers produced by smallscale fanners and lberefore raise production at the g rassroots level," be
""""""_ Commenting on the partnership, Managing DiIectoDChIef Executiveof NesUeNigeria. MI: Martin Woolnough, said that the Cassava Initiative is in Une with Nestl~ 's policy of procuring commodities for its business hom local suppliers and creating s h ared va lu e for a ll parties.
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EPSICO Incorpo rated and Tmgyi HoldingsCorp agreed to form an alliance in Qllna that will give both food and drink companies greater access to the biggest popuJation on the planet Underterms of tbedea1, Tingyi-Asahi Beverages, TAB, which is majority· owned by Tingyi, will assume PepsiCo's ownership in a netwodtof 24 bottlers located throughout Olina that are either owned by Pepsi or through existing joint ventures. In return, PepsiCo will receive a 5 pen::ent stake in TAB. worth about $55 million, according to a regulatory filing. PepsiCo has the option to increase its stake to 20 percent by 20 IS, when China is projected to become the world's largest market for bottled beverages. In addition to giving PepsiCo's sodas, sports drinks and juices access to Tingyl's vast
distribution network., the move helps dose thegap in Chlna betwee n PepsiCo and its archrival Coca·CoIa Co. A combined Pepsi and Tingyi would control about 20 percent of the Chinese so ft d rink market. ao::ording todala from Euromonitor International, overtaking leader Coca-Cola. which has marketsbare of nearly 17 pen::enl. PepsiCo is currently fourth with a 5.5 pen::ent stake. Consumer Edge Resea rc h analyst Bill Pecoriello said the deal wouJd allow PepsiCo to sbare in marketplace and infrasIructtm! investments and give it greater scale and a stake in a business with a better g rowtb profile. "Simply put. (or giving up controt o f its bottling operation. Peps iCo is likely to be ab le 10 ge nerate better growth in China over the next tbree to five years , " Pecoriello said .