Despite the challenges encountered in the 2016 financial year amidst the modest growth recorded in turnover, FrieslandCampina WAMCO Nigeria Plc has concluded plans to intensify its local raw milk sourcing in a bid to manage its volumes and margins judiciously to ensure a long term sustainable position.
Chairman of the company, Jacobs Moyo Ajekigbe, said that though 2016 was a challenging year due to the prevailing economic climate, which impacted on the cost of production, raw and packaging materials sourcing; the Company recorded remarkable achievements in operational efficiencies, cost management and improved productivity across the supply chain systems with new investments in human capital development and facility improvements.
Speaking on the company’s financial results for the 2016 financial year, Ajekigbe said the feat was recorded because the company made significant progress in the development of the dairy sector in Nigeria and in the process provided a source of sustained income to almost 2000 farmers (including 900 women).
“One primary focus during the year was to improve on the quality of raw milk obtained from our local suppliers and this was achieved by putting in place an efficient quality improvement programme. The programme involved extensive training of the Fulani milk producers at the herd levels on how to hygienically handle and deliver quality raw milk to the milk collection centres, with emphasis on thorough follow-up on the implementation of quality procedures.
“The Company made tremendous progress in its journey of continuous improvement in quality, ensuring that the high quality of the Company’s products is maintained throughout the value chain from grass to glass. This laudable pursuit of our Company was given credence in the course of the year with the achievement of Food Safety Systems Certification (FSSC) 22001” he said.
He added that the company held its position in the market during the year by raising the bar in distribution with extensive distribution network and coverage of sales outlets, whilst also reinforcing collaborative exchange with distributors to ensure continuous upgrade of their capability and skill sets for business sustainability and stability. The Company also created indirect employment for almost 1400 people via its route to market expansion.
While significant foreign exchange constraints, high inflation, milk price increase and low consumer purchasing power are likely to negatively impact the company’s sales and profitability in 2017, Ajekigbe expressed optimism that the firm will continue to utilize its resources efficiently and manage volumes and margins judiciously to ensure a long term sustainable position.
The Company’s Turnover increased by 2.5 percent from N120.72 billion in 2015 to N123.75 billion in 2016, while profit before tax (PBT) however increased by 7.2 percent from N18.62 billion to N19.96 billion as a result of the twin impact of the modest growth in turnover and significant reduction in administrative costs.