BUNMI ONI & CADBURY NIGERIA – 2
A lot has been said and written in the media and elsewhere about what has come to be referred to as the Cadbury Saga. First let me state clearly that none of my actions or decisions had anything to do with personal financial gain. Indeed, in an interview published in The Guardian newspaper of Sunday September 30, 2007, the Chairman of Cadbury Nigeria Plc Imo Itsueli affirmed that “…there is no fraud; there is no money missing. A lot of people don’t understand that nobody stole X billions of naira. No, it didn’t happen”. Second, it is not uncommon for businesses to experience challenges in their operations, especially when navigating the tough terrain of profound change management that comes with an aggressive growth and efficiency improvement agenda. In the Cadbury situation of 2002, this programme necessitated major initiatives on many fronts:
a. completely re-building and modernising an archaic manual and inefficient manufacturing plant that had seen no major investment for nearly 20 years,
b. rationalising the brand portfolio and constructing a new brand architecture,
c. designing and implementing a new route to market configuration and a new structure,
d. creating a new modern work environment, learning centre and a fitness centre,
e. upgrading the quality of management and staff to raise talent, as well as
f. building a commensurate IT-enabled business process platform across the commercial, supply chain and functional units.
Cadbury does not now acknowledge the milestones achieved on most of these projects, which have transformed the business beyond imagination. The task was compounded by incessant demands for more profits from Cadbury Schweppes Group, especially in the wake of the salmonella poisoning of Cadbury’s chocolates from its
Our vision to transform the West African operations of Cadbury into a $1b enterprise in about a decade – approved by the Board – was to be powered by the Nigeria/Ghana hub, two major acquisitions in the region, the opening of new territories and strategies to reach for the fortune at the bottom of the economic pyramid. That goal, though stretching, was deemed achievable, and was later validated by the performance in the telecommunications industry where a single company achieved over $1b in revenue in 2003 – its second year of operation – 98% of which came from prepaid air time, not from big business packages. The success of many Bank IPOs was further proof of what we had known – that the informal economy was awash with cash
The genesis of the “saga” was the failed £4.8m continuous plant, designed by Cadbury Schweppes
Cadbury instituted an inquiry and paid PWC N148m ($1.25m) to conduct a forensic investigation. PWC did not speak to me at all, nor did Cadbury send me the report of the investigations. Cadbury chose to go public in the way they did, suggesting an overstatement of N13b.
I eventually obtained the report over six months later from other sources. Whatever the brief to the PWC investigators was, they needed to conclude that I ran a solo shop. The report observed that I had an “authoritarian” management style and the only evidence was an extract from a memo I wrote on
“I thought I should underscore the challenge you have on the margin-neutral stock depletion plan, and the imperative to ensure the plan delivers completely”
“…the Sales Team has a big agenda at this time, and you need to ensure high visibility and attention for this project, for which you have full accountability. A deviation from the agreed KPIs will not bring you any commendation”
The report criticised the accounting treatment of staff gratuity, for which we had the written approval of the Nigerian Accounting Standards Board. PWC investigators from
A number of events paint the background more vividly.
1. Our resistance of Cadbury Schweppes determined effort to re-charge the cost of engineering and technical services in addition to Royalties and Technical Services Fees each amounting to 2% of sales revenue.
2. Cadbury Schweppes auditors had conducted two Balance Sheet audits in March and June 2006, with a final report in July. With regard to revenue recognition, the audits had concluded that “recognised sales are valid”.