South African based Pick n Pay Stores Ltd. announced plans to enter Nigeria after posting a 26 percent increase in full-year profit.
The company said it agreed to partner with Nigeria Stock Exchange listed AG Leventis & Co. to enter the Nigerian market because of its over 90 years’ experience doing business in Nigeria.
“A key part of the group’s strategy is to establish a second engine of growth in markets in the rest of Africa,” the company said in a statement on Tuesday. Pick n Pay will hold 51 percent of the operation in Nigeria, “which will roll out a combination of large and smaller formats to meet consumer needs.”
Currently, South African retailers are experiencing weak domestic consumer confidence, a weak currency and rising interest rates. The central bank cut economic growth forecast for South Africa to 0.8 percent this year, the slowest pace since the 2009 recession.
While speaking to the press after the company’s year-end results, CE Richard Brasher said:
“The opportunity presented by Nigeria is well-known: a population of 180m, an economy worth US$500 billion, and GDP growth of around 5% a year. Some analysts forecast that by 2030 Nigeria could have 160m households with sufficient incomes for discretionary spending, and a consumer goods market worth more than US$1 trillion.
“The development of modern shopping malls since 2005 in a few major cities reflects rising incomes and changing lifestyle options enjoyed by middle class Nigerians. Existing formal players in this market have relatively little scale.
“Nigeria is a country and a market which Pick n Pay cannot ignore in its quest for long-term sustainable growth. The challenge of course is how to succeed in Nigeria. We can all point to examples which have not worked.
“I set three pre-conditions for success in the Nigerian market:
- First, we need to understand local consumer needs and how these are evolving in the country. We have done an enormous amount of research on-the-ground over the past two years to get this right.
- Secondly, given the complexities of the Nigerian market, we believe a joint venture with an experienced local partner is the right approach. I am delighted with our decision to enter Nigeria with AG Leventis, which has nearly 90 years’ trading experience in the country. AG Leventis has huge expertise in supply chain logistics from their activities in the FMCG, motor vehicle, logistics and real estate sectors, and notable FMCG capabilities through Leventis Foods.
- Thirdly, as elsewhere in Africa, our growth must take place in a deliberate, planned, and unhurried way, without putting the business under undue risk.
“Leventis is a family business with a similar operating ethos to that of Pick n Pay and I am confident that we have the right decision, the right partner and the right plan.”
AG Leventis Group Executive Vice Chairman and CEO Michael Economakis said:
Otedola Moves to Sell Part of Geregu Power Plc to FEDA
Afreximbank to acquire part of Geregu Power plant
Billionaire Femi Otedola-owned energy company, Geregu Power Plc is in talks with the Fund for Export Development in Africa (FEDA) for the acquisition of part of the energy company.
The company stated in a statement signed by Akinleye Olagbende, Company Secretary and made available on the Nigerian Exchange Limited (NGX).
Geregu Power hereby notifies “Nigerian Exchange Limited (the Exchange) and the investing public of its discussions with the Fund for Export Development in Africa (FEDA) for the acquisition of a portion of Geregu Power Plc shares. FEDA is the impact development arm of the Africa Export and Import Bank (Afreximbank),” the company stated.
According to the energy firm, talks are presently ongoing and “where these talks progress to a more advanced stage, the company will notify the Exchange and the investing public in line with the rules of the Exchange.”
In October, Geregu Power listed 2.5 billion shares at N100 a unit on the Main Board of the NGX. This puts the company’s market value at N250 billion and also in a better position it to raise capital to bid for Geregu II as it is presently doing.
Speaking on the listing, the Chairman, Board of Directors, Mr. Femi Otedola, CON, said “the listing of the company was the actualization of a vision to bring world-class standards in governance sustainability, and business processes to the Company and the Nigerian electricity sector.”
He added that “listing on the Main Board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders”.
Otedola is the largest shareholder in FirstBank and also holds a 99% stake in Amperion Power, the owner of the Geregu Power Plant.
Access Bank Acquires Indirect Stake in Sigma Pensions
Access Holdings on Friday announced it has completed the acquisition of an indirect equity stake in Sigma and the merger of its subsidiary, First Guarantee Pension Limited (FGPL) with Sigma.
According to the bank, following the sanction of the Scheme of Merger between Sigma and FGPL by the Federal High Court on December 1, 2022, FGPL has been dissolved without winding up leaving Sigma as the surviving entity, according to Access Holdings.
Commenting on the transaction, Dr Herbert Wigwe, Group Chief Executive of the Corporation, said “Following the successful completion of the merger, our plan is to leverage the synergies of these entities, as well as the Corporation’s expansive distribution network, strong risk management culture and best-in-class governance standards to create a formidable pension funds administration business.”
Dangote Group Dismisses Rumours of Plan to Rise Cement Price
Dangote Cement says no price increase
Africa’s leading cement producer, Dangote Cement Plc has dismissed the rumor that it plans to increase the price of its products.
The clarification became necessary following a recent publication that Dangote Cement plans a fresh increase.
Recently, there has been some publication (Not Investors King) about a potential increase in the price of cement. The publications noted that the increase will be a result of the high cost of fuel among other prevailing issues.
According to the Senior Manager, branding and communication, Dangote Industries Limited, Mr Sunday Esan, “Dangote Cement is not embarking on a price increase”, stating that the increase is mere speculation.
Meanwhile, Dangote Cement in the third quarter of 2022, recorded an increase in the overall volume of cement sales by 6.2 percent to 20.8 metric tons in the third quarter of 2022.
According to the company’s Chief Executive Officer, Michel Puchercos, this was achieved, despite the elevated inflation caused by a very volatile global environment.
Similarly, while speaking on the increase in the price of fuel, Puchercos said “to mitigate the impact of the significant increase in energy and AGO costs, we are strengthening our efforts to ramp up the usage of alternative fuels”.
“We are on track to commission our Alternative Fuel feed system at Obajana lines I and V, and Ibese line II in November. In addition, we are ramping up our investment in Compressed Natural Gas (CNG), to reduce our AGO usage,” he added.
Investors King understands that Dangote Cement is Africa’s leading cement producer with nearly 51.6Mta capacity across Africa. Although it has a few competitors which include BUA Cement, the company supplies most parts of Nigeria.
In addition, Dangote Cement has operations in 10 African countries.
Its production plant in Obajana, Kogi state, is the largest in Africa with 16.25Mta of capacity across five lines while the Ibese plant in Ogun state has four cement lines with a combined installed capacity of 12Mta.
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