Although perceptions of political and economic instability in Nigeria have kept some investors at bay, Athens-listed Frigoglass points to the country’s position as the second largest economy in sub-Saharan Africa and its population of about 130 million as major factors for investing in this market.

With operations in 15 countries, Frigoglass is a manufacturer of ice-cold merchandisers (also known as commercial beverage coolers), which are sold and distributed to clients in the drinks industry worldwide. The company’s product range includes packaging products such as glass bottles and polyethylene terephthalate (PET) resin. In 2004, Frigoglass recorded revenues of €340m.


The company’s Nigeria division represents a significant part of its revenue stream. During 2004, activities in Nigeria made up 20% of group revenues and 13% of profits. Of this, 54.2% of turnover originated from glass, 9.6% from pre-forms, 7.7% from plastics, 8.3% from coolers and 20.2% from other activities.

Stake in glass

The company has more than 2000 employees working in its seven plants in Nigeria, and its presence in the country dates back to 1997, when it acquired a majority stake in Beta Glass plc, one of the largest producers of container glass in sub-Saharan Africa. Other operations in the country include the production of ice-cold merchandisers, plastic crates, PET pre-forms and metal crowns.

“During the past three years, growth has been slightly over 35% in local currency terms,” reports Dimitrios Lois, managing director at Frigoglass Group. “And close to €50m have been invested in the country since 2000.” This includes the completion of an €18m investment in two glass factories, the Guinea plant (in Agbara) and Delta plant (in Ughelli), in 2002. At the Guinea plant, €15m was spent on installing an automated production line to ensure conformity with international standards and rebuilding one of the furnaces to enable production capacity to be increased from 100 tons to 200 tons. At the Delta plant, €3m was spent on rebuilding a furnace so that daily production could be increased by 40%.

Delivery challenges

As a supplier to major drinks corporations, including the Nigerian Bottling Company, Nigerian Breweries (Heineken), Guinness and Consolidated Breweries, one of the challenges that the company’s Nigeria division faces is in providing a first-world level of product through a developing country infrastructure, says Mr Lois.

“To deliver products against quality, cost and time targets, we have to rely on empowering our employees (of which less than 1% are expatriates) in Nigeria to develop and implement plans that identify and address potential trouble spots. Talent recruitment, development and retention are therefore key to establishing the necessary organisational experience and knowledge,” he says.

Operating in Nigeria means coping with volatility in energy prices as well as local currency fluctuations, explains Mr Lois: “In 2001, the average naira/euro exchange was 100.34 while in 2004 it was 168.02. By increasing sales in hard currency through exports, as well as through foreign-exchange-linked pricing agreements with customers in Nigeria, we can significantly work to address these problems.”


Potential political and economic instability can be a challenge. However, Frigoglass’s Nigeria division is following a path of product diversification so that the business is less susceptible to changes in the political and macroeconomic environment. “Our operations in Nigeria are already more diverse than in other country markets, so this is providing a shield against over-reliance on any one particular sector,” says Mr Lois.

As more than 50% of Frigoglass’ Nigerian operations are directly related to its container glass business, the company is gradually working towards reducing its reliance on the domestic market. “Consequently, in the last few years, we have been embarking on plans to increase our glass exports,” says Mr Lois.

By initially focusing on ECOWAS [Economic Community Of West African States] countries – where a preferential import duty has been agreed between members – the company expects glass exports to be close to one-fifth of Beta Glass sales during 2005. “Additionally, we expect other opportunities to develop in other parts of sub-Saharan Africa,” says Mr Lois. “And these will be aided by export initiatives from the Nigerian government.”