Coca-Cola is moving ahead with plans to take over Nigeria’s leading juice company Chi Limited and aims to complete the deal early next year.
Last month it agreed to buy Costa coffee for $5.1 billion, and sources familiar with the matter say it is also bidding for GlaxoSmithKline’s Indian Horlicks nutrition business.
Juice sales form a central plank of the U.S. company’s attempt to offer drinks at a range of price points in Nigeria to improve affordability in a country where Njonjo sees high inflation and modest economic growth in the coming year.
Focusing on smaller bottles and cans is another way the company is trying to woo cash-strapped consumers in Nigeria, which emerged from its first recession in 25 years in 2017 but continues to suffer from sluggish growth and high inflation.
“Affordability will start becoming a bigger issue in this market than it was in the past. As a company, that is what we need to factor in as we are thinking about the future of our business in Nigeria,” Njonjo said in an interview.
Njonjo said the company’s drive to diversify its product range could also give it more flexibility in a market where unemployment is high and the United Nations estimates most of the population of 190 million lives on less than $2 a day.
Njonjo said the company was working in Nigeria to collect bottles and find a way for them to be re-used through a partnership with cement-maker Lafarge in which bottles would be burned in kilns as an energy source.
A memorandum of understanding was being formalised and would be signed in the next few weeks, he said, adding that implementation would begin in the last quarter of this year.