High cost of raw materials killing Nigeria bakery sector – Nextar CEO




As cost of commodities continue to increase, the Chief Executive Officer, Nextar Bread, Mrs Bukola Adewumi, in this interview with JOHN OBA, has raised the concern about the danger this portends to the sector.

As a bread producer, how would you rate the Nigeria bread industry vis-a-vis job creation and value addition to the economy?

The bread industry is a very big industry that has contributed meaningfully to the economic Development of the country, the truth is that bread is one of the most stable foods on every Nigerian table and therefore this makes it one of the highest employer of labour,  a lot of youths have been taken away from the streets.

Currently, how has the level of wheat price affected the industry? 

The constant increase in the price of wheat has affected the business as many bakeries at one time or the other closed because for every N500 added on every cost of raw materials, it will affect total cost of production and this in turn will lead to the collapse of the business.

How is your company doing in the face of the competition?

Nextar bakery is not different from any other bakery facing the series of challenges that needs urgent attention to avoid collapse of bread business which in not time will lead to lost as so many youths, men and women depend on this for their livelihood.

As a company we are doing all we can to compliment the efforts of the Federal Government in providing jobs for the country’s teeming youths but a lot of challenges that we faced on daily basis is not making the business favorable. Presently we have over 200 people and we hope to engage more than this but if the challenges continue it could affect this dream when there is no much work due to the issues  affect bakeries there will be no need to keep staffs.

Can you tell us some of the challenges that need urgent government intervention?

There are so many challenges affecting the bread business in Nigeria, one of the biggest challenges the bread business is facing now is the increase in prices of raw materials and the unavailability of raw materials.

The truth is that every week the prices of raw materials keep increasing not minding the end users 

The price of milk is now N51000 or N53000 as against N34, 000 that we were complaining of; sugar used to be N18,000, it is now N20,000.

Butter used to be N9,000. Now we buy the same butter for N14,000 or N15,000.

Flour was N12 000 after sometimes this increased to N 13500 then N14 000 now we are buying flour for N16000, the question is, how do we want the small bakery owners to survive with the daily increments. 

Another major problem is the issue of  multiple taxation from different government agencies doing same work 

Area councils come with their revenue at different times payment of huge taxes is killing business in Nigeria generally.

Sometimes in the beginning of the year we got over 15 taxes running in millions was given my bakery from one of the area councils in FCT, we had to start begging them for reductions and sometimes they will take the case to court if you don’t pay on time.

NAFDAC with multiple registrations and this processes are not easy, it is discouraging people from going into the business.

Electricity is another big problem, we pay for the light that is not even there, in Nextar we pay closed to a million Naira on monthly basis we pay heavily for light and most time we don’t get the light and without light we can’t do business diesel is expensive and most times we had to run on diesel for hours .

Remember water is not free we need to pay salaries and run the place.

We need the government to look into these issues and help us regulate the price of all the raw materials we are using in the bread industry and other industries.

The Federal government of Nigeria needs to intervene,  they need   to look into their area of operations because it seems they want to siphon money from Nigeria and keep in their country while we are living in poverty. What they are doing is clearly a sabotage to the economy.

A lot of bakeries are not  functioning  due to the challenges facing the industry, staff are being laid off. 

The Government need to look into the activities of flour Millers and sugar producers because it seems they want to make profit and put the country into chaos when you tell able youths to leave work what do you want they to do join banditry kidnapping robbery or what? 

How do you find yourself in the business and how do you see the industry in the next 10 years?

The business was borne out of passion. In the next few years I hope to see Nextar at the top, number one name in the country having branches in the states and rural areas to provide jobs opportunities to both men and women 

We hope to contribute our bit to the development of the Nigerian economy. We hope to serve Nigerians with the best nutritional and affordable bread loaves

What impacts are some of the recent policies of government such as the ease of doing business, tax rebate having on the business? Or are there any other policies you think are not appropriate and should be expunged?

My prayer is that Nigeria will overcome this challenges soon but the truth is that we all need to do our part to make Nigeria great again. I pray the prices of things are regulated government should see how to assist by giving their support to those that really need the support and not political person relations 

Today, the flour price have increased with over N2000. You can see that the 30% may not be feasible because not only flour price is increasing, sugar, butter has also increased, in fact everything we are using for production have increased.

The bakers association just increased with 30% and if care is not taken soon there will be another  increment as a result of all the increase of price in all the commodities we are using to produce bread and confectioneries.

No tags for this post.