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Eight top Nigerian consumer goods giants saw their combined input costs surge by 48 percent in one year as the companies grappled with foreign exchange losses and still high inflation.

BusinessDay’s analysis of the first quarter (Q1) financials of leading consumer goods firms, including Dangote Sugar, BUA Foods, Nigerian Breweries, International Breweries, Cadbury, Nestle, NASCON Sugar and Unilever Plc, showed that the manufacturers’ cost of sales soared to N1 trillion, down from N675.93 billion.

The spike in input costs — expenses directly tied to raw materials and production — underscores the growing impact of inflation, currency depreciation, and import dependency on Nigeria’s manufacturing sector.

Firms such as NASCON Allied Plc and Dangote Sugar Refinery saw the biggest jump in operating costs, even as they struggled to pass those costs to price-sensitive consumers.

Analysts say the rising cost burden could pressure profit margins and trigger further hikes in consumer prices, especially in food, beverages, and personal care items.

It also reflects the broader challenges businesses face in one of Africa’s largest economies, where naira volatility and logistics disruptions remain key headwinds.

Read also: Inflation seen dropping to 17.0% in November amid stable macros

In the period under review, the naira hovered around N1,500 to N1,600 while inflation averaged 23.96 percent, weighing on the cost of an industry that’s heavily exposed to foreign exchange.

Muda Yusuf, founder and CEO of the Centre for the Promotion of Private Enterprises (CPPE), linked the high costs to the depreciation of the naira and forex volatility, stressing that “manufacturers are hugely exposed to foreign exchange”.

“Most of them (the companies) import raw materials. So, the depreciation that came with the reform affected the cost of their input significantly,” he said.

Even though stability is returning with the naira jumping to a four-month high of N1,518 per dollar on Tuesday as liquidity improves and inflation decelerating for the third consecutive month to 22.22 percent in June from 22.97 percent in May, analysts say prices are still relatively high.

NASCON Allied Plc cost almost double in one year

NASCON Allied Plc saw its input costs almost doubled in one year even as the consumer firm’s profit rose to its highest in at least five years.

Its cost of sales rose by 92.2 percent, rising from N12.46 billion in Q1 2024 to N23.95 billion in the same period this year.

Despite the sharp increase in the company’s cost, its operating profit for the quarter surged to N10.42 billion, a significant increase from the N1.78 billion recorded in Q1 2024.

The firm also recorded a 77 percent rise in revenue as top line growth surged to N41.9 billion, compared to N23.6 billion recorded during the same period in 2024.

The firm also recorded a 77 percent rise in revenue as top line growth surged to N41.9 billion, compared to N23.6 billion recorded during the same period in 2024.

Dangote Sugar refinery cost surges by almost 80%

Dangote Sugar Refinery experienced a significant rise in input costs that jumped by 79.6 percent from N113.97 billion in Q1 2024 to N204.67 billion in the reviewed period.

In spite of the cost pressures, the firm reported its highest quarterly revenue of N213.93 billion, up 74.31 percent year-on-year. But profitability remains a challenge due to rising raw material costs.

In Q1 2025, the cost of sales consumed 95.67 percent of revenue, leaving minimal room to cover operating, interest, and other expenses. However, the company’s losses slowed by 65 percent in the first quarter to N23.64 billion.

The company appointed Arnold Ekpe as the new board chairman upon the retirement of Aliko Dangote after two decades steering the affairs of the sugar refining firm.

Analysts see Ekpe’s appointment as a strategic effort to use his decade-long experience in the banking and finance sector to turn the tide around for the company that has suffered FX-induced losses in recent times.

International Breweries, Nigerian Breweries costs increased by 53%, 49.5%

Brewers are equally grappling with rising input costs as International Breweries and Nigerian Breweries both saw their cost of sales rise by 53 percent and 49.5 percent respectively in one year.

While cost pressures persist, the sector is riding on naira stability to overturn its losses. International Breweries reversed its net foreign exchange losses of N80.5 billion in Q1 2024 to positive of N581.4 million in the months to March this year.

Nigerian Breweries on the other hand also saw a sharp drop in its losses as it fell to N178 million in the first three months to March compared to N72.9 billion in the corresponding period last year.

Uchenna Uzo, professor of marketing at Lagos Business School (LBS) sees improving macroeconomic conditions in the county easing cost pressures moving forward.

Uzo who doubles as the faculty director at LBS noted that while inflation remains high, the rate of change in prices hasn’t been significantly higher than it was in 2024.

“The macroeconomic fundamentals have been a bit better for businesses and this has helped a lot of the brewers in their planning,” Uzo said.

“This has shown in better sales results and so these sales results are not necessarily coming from higher consumption, but because the beer makers have come to manage their portfolios better and they’ve also come to understand how to manage price increases.

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Unilever Nigeria Plc

Unilever Nigeria Plc costs almost surged by almost 50 percent as the company continues to battle with rising operating costs. The firm’s cost of sale rose from N18.81 billion in 2024 to N28.12 billion in Q1 2025, even as profitability nearly doubled.

Unilever Nigeria’s profit after tax soared to N5.55 billion from N3.36 billion in the same period of 2024, signalling a strong comeback powered by improved cost control, higher revenue, and disciplined capital management.

Similarly, the firm’s revenue grew 45 percent year-on-year to N46.98 billion, up from N32.32 billion in Q1 2024, driven by strong sales across all three of its core segments—food products, personal care, and beauty & wellbeing.

BUA Foods Plc

BUA Foods Plc saw its cost of sales grow by 39.4 percent at the company level, rising to N22o.22 billion in Q1 2025 from N157.98 billion in the prior year. This is as the firm’s profit rose by 124 percent to N125.28 billion.

The company’s top-line revenue also grew by 24 percent to N442.1 billion, underscoring robust consumer demand and improved internal efficiency despite ongoing macroeconomic headwinds.

The food manufacturing giant saw strong contributions across its business segments, particularly from flour and rice. Flour revenue jumped 145 percent to N176.2 billion, while rice posted an unprecedented 1617 percent increase to N13.02 billion, albeit from a lower base.

Read also: BUA Foods’ Q1 profit surges 124% as rice, flour sales soar

Cadbury Nigeria

Cadbury Nigeria Plc input cost rose by 34.1 percent in one year, surging from N18.70 billion to N25.07 billion as the consumer goods giant continues to grapple with inflationary pressures and currency fluctuations.

Cadbury recorded a pre-tax profit of N8.5 billion, on increased domestic sales, marking a significant turnaround from a loss of N10.4 billion reported in the same quarter in 2024.

The firm’s revenue also increased by 57.11 percent, soaring to N37.2 billion in Q1 2025 from N23.6 billion in the prior year.

Nestle Nigeria

In one year, Nestle Nigeria Plc saw its cost of sales grow by 30.3 percent, increasing from N134.41 billion in Q1 2024 to N175.16 billion in the same period this year.

Even as the company grapples with surging costs, it posted a strong recovery in the first quarter of 2025, returning to profitability with a net income of N30.2 billion, a significant reversal from a loss of N142.7 billion in the same period last year.

Looking ahead, the easing inflationary trends and continued stability of the naira is expected to cut down the input costs these companies face.

Also, the foreign exchange risks have also pushed Nigerian firms to embark more on backwards integration, as they look to source their raw materials locally to hedge against FX.