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Nestle to Invest $1.4bn to Boost Cocoa Production, Farmers’ Income, Lessen Child Labour

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Top chocolate producer, Nestlé has revealed plans to continue expanding its cocoa sustainability efforts, through investing a combined $1.41 billion by 2030.

The investment, which is thrice Nestlé’s current annual investment, is part of an innovative income accelerator program, which aims to improve the livelihoods of cocoa farming families in West Africa.

According to the Swiss international food and drink processing firm, the program covers cash incentives for farming families to reduce the level of high child labour, especially in cocoa-growing nations like Ivory Coast, Ghana, etc.

The University of Chicago, in a recent study, disclosed that about 45% of children in agricultural households in Ivory Coast and Ghana cocoa farming areas were engaged in child labor.

Recently, chocolate-producing companies have come under pressure by the United Nations International Children’s Emergency Fund and other global organisations to invest in cocoa-farming communities facing dire challenges, including widespread rural poverty, lack of access to financial services and basic infrastructures like water, health care, and education. These are factors that increase child labour as children support their families in cocoa production.

Nestlé’s cash incentives will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school, the company stated.

The company’s CEO, Mark Schneider during a webcast on Thursday said, “Nestle’s new initiative focuses on the root causes for child labour and the living income gap farmers and their families face… Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time.

“Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs, and others in the cocoa industry, we can help improve the lives of cocoa farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.”

The KitKat Chocolate and Smarties confectionery producer stated that the Accelerator Program will aid the company to transform its global sourcing of cocoa through a fully traceable, directly sourced supply chain by 2025.

In 2021, 51% of the cocoa Nestlé used was directly sourced and traceable, versus 46% in 2020. By 2025, the company expressed that it fully wants to trace 100% of its cocoa back to specific farms under its in-house sustainability scheme, the Nestle Cocoa Plan.

“We’re very confident this will be a game changer on the road to reducing the risk of child labour,” Nestlé Head of Operations, Magdi Batato said in an interview with Reuters.

To qualify for the payments from Nestle, farmers must send their children to school, prune cocoa trees, plant shade trees and diversify their income with other crops or livestock.

Then each farmer, irrespective of the tonnes of cocoa produced by them, will directly receive cash payments via mobile transfer of up to 500 Swiss francs ($543) a year.

This, according to Batato represented 20-25% of a farmer’s average annual income. The incentive will then be levelled at 250 francs after two years and progressively extended to all of Nestle’s 160,000 cocoa farmers by 2030.

In an interview, Nestlé Head of Confectionery, Alexander von Maillot said, “An incentive to the household is much more inclusive of the smaller farmers, really making sure that nobody gets left out.”

To ensure that children really are attending school and farmers are following the rules, Nestlé disclosed that The Sustainable Trade Initiative will monitor the programme with other third parties. It also explained that children helping on family farms outside of school time do not fall under the International Labour Organization’s description of child labour.

 

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Dangote Refinery Sells Petrol At N990 Per Litre to Trucks

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Dangote refinery has finally announced the price of premium motor spirit (PMS), popularly known as Petrol, following months of back and forth.

The company said it sells to domestic marketers at N971 per litre into ships and N990 into trucks, according to a statement signed by Anthony Chiejina, Group Chief Branding and Communications Officer and released on Sunday evening.

“Post deregulation, NNPC set the pace by selling PMS to domestic marketers at N971 per litre for sale into ships and at N990 for sale into trucks. This set the benchmark for our pricing, and we have even gone lower to sell at N960 per litre for sale into ships while maintaining N990 per litre for sale into trucks”, the company said in the statement released on its X page.

On a series of accusations and counter-accusations from IPMAN, PETROAN, and other associations, Dangote refinery said it is impossible to land petrol at a lower price than Dangote refinery’s current price, except they are importing substandard products.

“Both organisations claim that they can import PMS at lower prices than what is being sold by the Dangote Refinery. We benchmark our prices against international prices, and we believe our prices are competitive relative to the price of imports.

“If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles. Unfortunately, the regulator (NMDPRA) does not even have laboratory facilities which can be used to detect substandard products when imported into the country.”

The company claimed it started selling at the stated rates without knowing the exchange rate that would be used to pay for the crude purchased.

Meanwhile, the company has said an international trading company rented a depot facility close to its refinery with plans to start blending substandard products and dump them into the Nigerian market to compete with Dangote refinery’s better quality.

“This is detrimental to the growth of domestic refining in Nigeria. We should point out that it is not unusual for countries to protect their domestic industries in order to provide jobs and grow the economy. For example, the US and Europe have had to impose high tariffs on EVs and microchips in order to protect their domestic industries.”

“While we continue with our determination to provide affordable, good quality, domestically refined petroleum product in Nigeria, we call on the public to disregard the deliberate disinformation being circulated by agents of people who prefer for us to continue to export jobs and import poverty.”

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BUA Foods Revenue Surges 104%, Hits N1.07 Trillion Amidst Rising Costs

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BUA Foods Plc, one of the fastest-growing food companies in West Africa, grew revenue by 104% in the period ended September 30, 2024 to N1.070 trillion from N524.48 recorded in the same period in 2023.

The company’s cost of sales also inched higher to N736.975 billion, a 116% from N349.648 billion filed in the corresponding period of 2023 while gross profit rose by 82% to N333.820 billion.

BUA Foods spent 45% more on selling and distribution expenses at N29.319 billion in the period under review from N20.273 billion.

Also, more money was spent on administration as administrative expenses jumped 84% from N7.913 billion to N14.545 billion. During the period, the company spent N43.862 billion on operating expenses, representing a 56% increase from the N28.185 billion spent in 2023.

Still, the 104% increase in revenue bolstered operating profit by 101% to N315.126 billion from N156.883 billion in 2023.

Loss due to foreign exchange fluctuation dragged on the company’s profit before income tax in the first nine months of the year as N87.961 billion was lost due to Naira devaluation to contain profit before tax at N215.657 billion.

Profit after tax increased by 91% from N105.618 billion in 2023 to N201.389 billion.

Commenting on the results, Engr. (Dr.) Ayodele Abioye, the Managing Director, said “We are thrilled to have sustained a remarkable growth trajectory, underscoring the impact of our strategy, innovative product development, and steadfast commitment to quality, even in the face of a challenging business climate.

“Revenue grew by 104% to N1.07 Trillion compared to the same period last year, while our gross profit stands at N333.8 billion, reflecting a growth of 82%. We saw the benefits of our production capacity expansion and product innovation, as we witnessed an 11% growth in aggregate volume which has further strengthened our position within the industry.

“Looking ahead, we will remain steadfast in addressing current food supply challenges by leveraging newly commercialized supply chain assets across our business divisions. We would maintain focus on driving internal efficiencies for business growth towards delivering long-term shareholder value.

“We thank our stakeholders, particularly our customers, and consumers for their love for the brand even as we continue to nourish lives.”

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Dangote Urges NNPC, Marketers to Halt Petrol Imports and Source Locally from Lagos Refinery

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Aliko Dangote - Investors King

The founder and Chief Executive of Dangote Group, Aliko Dangote, has urged the Nigerian National Petroleum Company (NNPC) and independent oil marketers in Nigeria to halt petrol imports and source the product from his Lagos refinery.

Dangote made this appeal on Tuesday at the State House, Abuja, while addressing Nigeria’s fuel scarcity issue after a meeting with President Bola Tinubu.

According to the business mogul, the country should not rely on petrol imports when his refinery has over 500 million litres in storage.

Investors King reported that oil dealers in Nigeria resumed importing petrol from abroad, claiming Dangote’s refinery could not meet demand. The marketers said they turned to foreign refiners to avert fuel shortages.

During the press briefing at the State House, however, Dangote emphasized that he should not be blamed for the scarcity or the long queues at petrol stations, as he is only a producer, not a retailer.

Dangote revealed that the NNPC’s reluctance to buy from his refinery costs him money daily.

He explained, “We are producers. I have a refinery. I’m not in the business of retail. If I were, then you could hold me responsible. But what I’m saying is that the retailers should please come forward and pick up the supply. If they don’t, what do you expect me to do? There is nothing I can do.”

“I expect either the NNPC or marketers to stop importing and collect the supply we have here. Keeping millions of litres in storage costs me daily,” Dangote added.

Fuel scarcity has plagued Nigeria since Bola Tinubu announced the end of the fuel subsidy upon assuming office. Despite the establishment of Dangote Refinery in Lagos, Nigerians hoped that petrol scarcity would soon be a thing of the past. While the refinery promised 650,000 barrels per day, the problem persists with no end in sight.

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