How Honeywell maintained commitment to feeding Nigeria during COVID-19 pandemic

Honeywell's success demonstrates an understanding of market dynamics and ability to rise to any occasion.

How Honeywell maintained commitment to feeding Nigeria during COVID-19 pandemic

When COVID-19 pandemic hit the world in the first quarter of 2020, many companies, including Honeywell Flour Mills, were confronted with series of unprecedented challenges.

Key amongst the challenges was the need to ensure the safety of their workforce amid increasing demands for staple foods, where Honeywell Flour Mills is a key player.

The announcement of a two-week lockdown by Nigerian Government was followed by a sudden surge in demand for food items because of panic buying by consumers who feared the resultant effect of the lockdown on market activities and supplies by food companies (BBC, 2020).

From two weeks, the lockdown extended to about two months resulting in economic downturn in the country.

Many private organisations laid-off staff while others slashed salaries (Pulitzer Center).

Despite these challenges, Honeywell Flour Mills was able to meet the demands of consumers satisfactorily during the lockdown period by ensuring people that are critical to factory operations were on ground.

This demonstrates the company's agility, understanding of market dynamics and ability to rise to any occasion.

The outcome of these strategic moves was an unprecedented growth in all the financial metrics of the business at the end of its last financial year ending March 2021.

Revenue grew by over 36 per cent, from N80.45 billion in 2020 to N109.59 billion in 2021.

Profit after tax increased by 73.1 per cent while operating costs also increased by 39.1 per cent.

Lanre Jaiyeola, the Managing Director of Honeywell Flour Mills, attributed the remarkable growth to the sheer grit and doggedness of the company's workforce.

He also credited collaborative effort, improved production, cost optimisation, and guidance provided by a clear strategy and common purpose (Nigerian Tribune, 2021).

The movement restrictions occasioned by the lockdown caused consumers' behavioral changes that grew demands for essential items such as food.

Honeywell Flour Mills identified and doggedly seized the opportunities created by these changes by focusing on its consumer brands, which include Pasta, Noodles, Semolina and Wheat Meal.

Production was increased to satisfy the growing demands, this helped consumers navigate the uncertainties of the pandemic.

According to the MD, Lanre Jaiyeola, the consumer goods category was a significant contributor to the increased volume growth experienced in the last financial year, up by 26 per cent compared to the previous year.

Pasta was a major driver in this category, growing 40 per cent from the previous year while the Ball Foods category, Semolina and Wheat Meal, also contributed double-digit growth at over 20 per cent (Nigerian Tribune, 2021).

Guided by a proper understanding of the changing consumer behaviour, Honeywell Flour Mills optimised the production capacity of its Pasta factory in Sagamu, Ogun State.

The facility which had only been completed two years ago became instrumental in stepping up to the rising market demands and contributed more than 17% to the total revenue realised in its financial year ending March 2021.

The company also recorded a sales volume growth of 40 per cent for its Pasta category and 20 per cent for its Semolina and Wheat Meal products (Nigerian Tribune, 2021).

Another strategic decision Honeywell Flour Mills employed to navigate the pandemic was to ensure that its food prices were not gravely affected by the market conditions warranted by the pandemic.

While the cost of raw materials and packaging materials were soaring because of distressed global trade, Honeywell was keen on not passing these increased costs of production to consumers at a sensitive financial period when the pandemic had greatly impacted the pockets of consumers.

To achieve this, the company implemented initiatives that improved efficiency and reduced its operating expenses by 4% (Nairametrics, 2021).

These kept the prices of the products significantly below the prices of other staple food commodities like yam, rice and cassava (Nigerian Tribune, 2021).

With its workforce incredibly busy during the lockdown, Honeywell Flour Mills had to prioritise their health and safety by ensuring measures were put in place to curb the spread of COVID-19.

According to Lanre Jaiyeola, "As a food manufacturer in a critical industry, the health, safety and well-being of our people have always been our highest priority because we were convinced that once our people are safe and motivated, the business will be able to overcome any challenge that the pandemic brought.

"We implemented a wide range of protocols across all our manufacturing locations to prevent the occurrence and spread of the virus and thankfully, we did not have to shut down any of our locations due to the outbreak of the virus." (Nairametrics, 2021)

With the noteworthy achievements recorded in its financial year ending March 2021 and its tenacity in ensuring the safety of its people, Honeywell Flour Mills is ready for another year of providing affordable and nutritious food to satisfy the needs of consumers.



Eyewitness? Submit your stories now via social or:


Recommended articles

CBN explains why Nigeria needs e-naira

CAC registers 245,000 SMEs free of charge

Nigeria's import index grows by 1.07% between April and June — NBS

Invest or run: What are the real opportunities in the entertainment industry?

5 best shares to buy in Nigeria

Nigerian Stock Exchange drops further by 0.08% on banking stocks loss

Electric firm launches Partnerships of the Future

Dangote says execution of sugar master plan can save Nigeria $700 million yearly

NGX market capitalisation opens week with N20 billion loss