The Managing Director, UAC Foods Limited, Dr. Tawanda Mushuku, has said that the continuous rise in the prices of petroleum products is impacting negatively on consumer spending and in turn affecting the turnover of stakeholders in the fast-moving consumer goods sector.
Mushuku spoke with our correspondent at a dinner and award night organised by the Association of Consulting Engineers in Nigeria in Lagos on Wednesday.
According to him, fuel prices seem to have a control over consumer choices and spending patterns.
“In 2012, UAC posted 78 per cent gross profit. We are also focusing on increasing turnover in 2013 despite the difficulty in the trading environment and the fuel price increase, which obviously seems to be biting hard into consumer spending,” he said.
He said the company, which is a joint venture business of UAC of Nigeria Plc and Tiger Brands International, was significantly increasing its FMCG business in the country despite challenges.
Tiger Brands had in September 2012, announced that it had bought 63.35 per cent equity stake in Dangote Flour Mills, with the Dangote Group retaining 10 per cent stake while the Chairman of the group, Alhaji Aliko Dangote, remained the chairman of the mill.
The company reportedly spent about N30bn, an equivalent of $190m, in the acquisition bid while it made its first two acquisitions in the country when it bought biscuit manufacturer, Deli Foods, and secured a 49 per cent stake in UAC of Nigeria’s food and beverage businesses.
“In terms of products efficiency, investment, quality and innovation, we are increasing our FMCG business in Nigeria. We have also transformed in the area of the development of our people in different business areas to improve value chain,” he said.
While addressing ACEN members, Mushuku said growing a business required understanding the value chain and profit formula, adding that fragmented business practices and lack of accountability constituted the bane of businesses.
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