TABLE OF CONTENT
Title page
Certification page
Approval page
Dedication page
Acknowledgement
Abstract
CHAPETR ONE
INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research questions
1.5 Research Hypotheses
1.6 Significance of the study
1.7 Scope of the study
1.8 Limitation of the study
1.9 Definition of key terms
1.8 Organization of the study
CHAPETR TWO
2.0 LITERATURE REVIEW
CHAPETR THREE
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.1 Introductions
4.2 Data analysis
CHAPTER FIVE
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
Appendix
Abstract
This study examined the economic environment and the growth of selected brewery firms in Nigeria. To achieve this, an exploratory study was carried out between 1980-2019. The researcher set out four research objective; to examine the effect of economic environment on the growth of brewery industry, to examine the effect of business environment on return on investment, the theory that was adopted to anchor the study was the system theory and corporate social responsibility theory, the method data analysis for the data obtain from the questionnaire was the simple percentage and chi-square statistics, this data were analyzed with the aid of statistical package for social sciences (SPSS) at the completion of the study, the study recommend that Nigerian companies should not only ensure that they operate at optimum levels by developing and effectively deploying up-to-date resources but be conversant and properly tuned to the environment of business in Nigeria.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The environment of going concerns, like the habitats of animals, contributes to their development. Like the natural environments of living beings, the environment of a business can either enhance or stifle its growth and development. The nature and extent of the impact of the environment on any one company depends on the internal configuration of such a company. Researchers have categorized the environment into three components, the preparedness of any one company being referred to as the internal environment. These are the macro environment, the industry environment and the internal environment. It has also been shown that the internal environment affect performance most followed by the industry environment and lastly, the macro environment. Nigeria started as a company, the Royal Niger Company, became a protectorate and finally a Republic. As a Republic there were businesses that were run by the government. The government was doing business and also providing enabling environment for businesses. With time it became obvious that the Government was not a good entrepreneur and that it was better to concentrate in providing an enabling environment while private organizations are allowed to run the businesses. This led to the wave of privatization that is still ongoing. The interplay of government and business first as a direct participant and later as a provider of an enabling environment suggests the importance of the environment in the prospects of businesses. It would appear that due to the developing nature of the Nigerian business environment, it is likely to occupy a critical position in the performance of businesses. A brewery is a dedicated building for the making of beer, though beer can be made at home, and has been for much of beer’s history. Thus, a company or industry that makes beer is called either a brewery or a brewery industry. The diversity of size in breweries is matched by the diversity of processes, degrees of automation, and kinds of beer produced in breweries. Generally, world beer production has been on upward trend with minimum annual growth rate of 1.3% from 2000-2003. The growth of beer production has been remarkable in Asia, Europe and America. But in Africa and Australia, production growth rate has remained at less than 1%. Europe is the world’s leading region in beer production with a growth rate of 1.5% from 2000-2003, followed by the USA, Asia, Africa and Australia (Babor, 2008) The brewery industries in Nigeria are one of the flagship consumer sectors and have rightly become a priority holding for many investors in the Nigerian Stock Market (Furnivall, 2009). Nigerian Breweries was incorporated in 1946 and currently operates 5 breweries namely Lagos, Aba, Kaduna, Ibadan and Ama. Nigerian Breweries brew, bottles and distributes beer and malt drinks. The brewery industry is one of the fastest growing branches of Nigerian manufacturing sector. It contributes about 28% of Manufactured Added Value (MAV) and provides direct employment for over 50,000 persons. The indirect employment associated with the industry is close to nearly 500,000 including the firms producing ancillary services (Wole, 2009). Orekoya (2009) states that there were about 32 breweries in 1991 producing more than 40 beer brands based on an equity research on brewery industries in Nigeria. Production grew rapidly from 1980-1982, being the fastest branch of the manufacturing sector in Nigeria. The volume of production was five times greater than earlier production in 1970. In 1982-1986 when most branches experienced severe difficulties, production fell marginally during 1987 and 1988 due to restrictions on the import of barley malt and problems associated with the use of locally produced substitutes. Over the past twenty years, Nigeria has experienced rapid rural-urban migration leading to tremendous urban growth. This growth in population has given rise to environmental degradation, which now characterized most of our towns and cities (Okpala 1999). Thus, it can be equally traced to the presence of industrialization. The growth of economic activities like manufacturing, commerce etc and the provision of social amenities such as good roads, transportation network, potable water etc, have brought the tendency to transform a city from its natural environmental state to an artificial state (Best 2001). The establishment of a manufacturing industry improves the livelihood of the area where it is located through its employment opportunities and growth/multiplier effect tendencies (Ilori et al 2002) Nigerian brewery sector is increasingly attracting the attention of global industry players such as SAB Miller, Carlsberg, and Castel. These interests reaffirm the growth opportunities embedded in the brewery industry. It is expected to generate a positive development for the sector regarding volume growth and deeper market penetration. The industry has proven its mettle inability of value creation as reflected in the superior Return on Equity (ROE). It is related to the other sectors in the country. Moreover, instructive is the fact that this return is less levered as the brewers are highly cash generative and parade low-debt capital structures. Regarding market returns, the brewery industry has done pretty well in outperforming Brazil, Russia, India, and China (BRIC) and emerging markets by a wide margin over the past ten years (Vetiva Capital Management Limited, 2010). Hence, this research attempts to assess the financial performance of the firms in the brewery industry using financial ratios from 2011 to 2015. Structure Conduct Performance (SCP) theory was first introduced by Mason in 1939 as a method of analyzing markets and firms (Worthington, Briton, & Rees, 2001). It explained that the concentration of market promoted collusion among large firms in the industry which subsequently led to greater profits. Moreover, the performance of industry was determined by the suppliers and consumers who in turn was determined by market structure. Hence, the performance of the Nigerian Brewery Industry is expected to be determined by the players in the industry and the market structure.
1.2 STATEMENT OF THE PROBLEM
The Nigerian business environment has witnessed a lot changes from the period of the oil boom in the 1960s and the early 1970s. Austerity measures in the early 1980s and the structured adjustment programme in the late 1980s from the company act of 1960s allied matter decree in the 1990s, undoubtedly brought in the eighty’s the opportunities to be exploited by some firms in the brewery industry or the problems that inhibit the survival of so many business firm. The need for studying business environment became important considering the fact that business organization do not operate in vacuum and effective management in complex and dynamic society such as Nigeria, requires the assessment of strengths and weaknesses of the organization and the opportunities and threats posed and the challenges of the external environment by the challenges of the external environment. For survival and growth, organization must adapt to these changes. This has made this study very pertinent to the growth and survival of brewery firms in Nigeria
1.3 OBJECTIVE OF THE STUDY
This study has two major objective; the broad and the specific objectives, the broad objective covers the economic environment and growth of selected brewery firms in Nigeria. The specific objectives are;
- i) To examine the impact of economic environment on the growth of brewing firms
- ii) To ascertain if there is any significant relationship between business environment and firms profitability
iii) To examine the role of government in creating a business friendly economic environment for breweries to operate
- iv) To ascertain the effect of economic environment on firms productivity in Nigeria
1.4 RESEARCH QUESTIONS
The following research questions were formulated by the researcher to aid the completion of the study;
- i) Is there any impact of economic environment on the growth of brewing firms?
- ii) Is there any significant relationship between business environment and firm's profitability?
iii) Does government play any significant role in creating a business friendly economic environment for breweries to operate?
- iv) Does economic environment of firms has any effect on her productivity in Nigeria?
1.5 RESEARCH HYPOTHESES
The following research hypotheses were formulated by the researcher to in null and alternate form to aid the completion of the study
H0: stands for null hypotheses
H1: stands for alternate hypotheses
H0: There is no significant relationship between business environment and firm's profitability
H1: There is a significant relationship between business environment and firm's profitability
H0: government does not play any significant role in creating a business friendly economic environment for breweries to operate
H2: government does play a significant role in creating a business friendly economic environment for breweries to operate
1.6 SIGNIFICANCE OF THE STUDY
It is believed that at the completion of the study, the findings will be of great importance to the management of brewing firms as the study seek to explore the potency of economic environment on the growth and survival of brewing industry in Nigeria. The study will also be of great importance to the government and policy formulators as the findings and recommendation of the study will aid in effective policy formulation that will create a business friendly economic environment in Nigeria, the study will also be of importance to researchers who intend to embark on a study in a similar topic as the study will serve as a pathfinder to further studies. Finally, the study will be of great importance to student, teachers, academia's, and the general public as the study will contribute to the pool of existing literature on the subject matter and also contribute to knowledge.
1.7 SCOPE OF THE STUDY
The scope of the study covers economic environment and the growth of selected brewery firms in Nigeria from (1980-2019). With major focused on the brewery industries in Nigeria within the study time frame. Though enough relevant literature were reviewed to give the study it's theoretical backing.
1.8 LIMITATION OF THE STUDY
In the course of the study, there are some factors that limited the scope of the study;
Reliance on most literature that were based on the opinions of the writers rather, rather than those whose result was empirically tested due to inadequate research work in this area.
There was a dearth of information written by Nigerian authors and other researchers on economic environment which has cripple so many prospective investment. Therefore the researcher also relied more on foreign related literature, and to some extent the attitude of the respondents in handling the questionnaire. Although confidentiality was assured and questionnaire was structured, since the researcher have no control over the feeling of the respondents in filling of the questionnaires. It is difficult to determine whether the respondent have accurately conveyed their feelings while completing the questionnaire
1.9 DEFINITION OF KEY TERMS
Economic
Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work.
Environment
Environment is everything that is around us. It can be living or non-living things. It includes physical, chemical and other natural forces. Living things live in their environment
Economic environment
Environmental economics is a sub-field of economics concerned with environmental issues. It has become a widely studied topic due to growing environmental concerns in the twenty-first century
Brewery
A brewery or brewing company is a business that makes and sells beer. The place at which beer is commercially made is either called a brewery or a beerhouse, where distinct sets of brewing equipment are called plant.
Economic growth
Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time.
