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Dangote Flour Returns to Profitability

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Dangote

One the factors that have endeared the President of Dangote Group, Alhaji Aliko Dangote to invest in the nation’s capital was his decision to list some of the his companies on the Nigerian Stock Exchange (NSE). That decision gave opportunity to investors to share from his wealth through dividends payment. The first company in the Dangote Group to list on the NSE was Dangote Sugar Refinery.

Today there are Dangote Cement Plc, which is the most capitalised on the exchange, Dangote Flour Mills (DFM) Plc and Nascon Allied Industries Plc. These companies have been rewarding shareholders with dividends. However, shareholders in DFM Plc had a raw deal when Dangote Industries Limited (DIL), decided to sell part of that company to South African firm, Tiger Brand in 2012. Soon after the sale, the fortunes of DFM nosedived, leading to accumulated losses. However, in a bid to prevent the company from going under and save several jobs, DIL last December. Months after the re-acquisition from Tiger Brands, Dangote Flour Mills has returned to profitability.

Corporate Profile

Dangote Flour Mills Plc commenced operations in 1999, as a division of Dangote Industries Limited (DIL), one of Nigeria’s largest and fastest growing conglomerates. Following the strategic decision of DIL to unbundle its various operations, DFM was incorporated in 2006. The restructuring was completed in January, 2006 when the Federal High Court sanctioned a scheme of Arrangement wherein all the assets, liabilities and undertakings of the erstwhile flour division of DIL was transferred to DFM.

From an initial installed capacity of 500 MT per day at its Apapa mill, Dangote Flour has expanded rapidly by opening in quick successions three other flour mills in Kano (2000), Calabar (2001) and Ilorin (2005). Each of the mills started with an installed capacity of 500 MT per day but all of them have subsequently expanded resulting in a total installed capacity of 5,000.

The expansion was in response to a growing national demand for flour and flour based products in addition to the company’s drive for increased market share. Thus from a modest beginning the company has grown to become one of the industry leaders within a six-year period. The company has three wholly owned subsidiaries, comprising Dangote Agro Sacks Limited, Dangote Pasta Limited and, Dangote Noodles Limited.

Financial Performance

The company posted a profit before tax (PBT) of N2.64 billion for the nine months ended June 30, 2016, compared to a loss of N9.55 billion posted in the corresponding period of 2015. An analysis of the results showed that Dangote Flour Mills, which consists of Dangote Flour, Dangote Pasta, and Dangote Noodles, recorded a gross profit of N14.03 billion by June 2016 as against N2.62 billion by June 2015. Profit from operating activities rose to N8.47 billion by June 2016 compared with trading loss of N3.48 billion in comparable period of 2015. After tax, net profit stood at N2.84 billion by June 2016 as against net loss of N9.11 billion in 2015. Earnings per share showed 76.5 kobo as against loss per share of N2.42 in 2015.

Gross profit margin more than tripled to 28.14 per cent by June 2016 as against 7.9 per cent in corresponding period of 2015. Pre-tax profit margin stood at 5.3 per cent in 2016, as against negative margin of 28.9 per cent in 2015.

Commenting on the results, Group Chief Executive Officer, Dangote Flour Mills, Thabo Mabe said the return to profitability follows several strategies adopted by the company to increase market share and create value for shareholders. He said that the flour mill is driven by the vision of putting its products on the table of every Nigerian.

Justifying Reacquisition

Although the re-acquisition of DFM attracted various interpretations, sources close to the DIL had said the company had to consider the repurchase so as to keep the it as a going concern, which preserves value for the minority retail shareholders and also secured direct employment for over 3,000 employees.

“Going by every indication, the future of the company was very doubtful and that was risky for the employees which are over 3,000 Nigerians apart from others who benefit from the company’s services through other ancillary services. The return of DIL is therefore a big relief and good decision to save the jobs of the staff of TBCG,” a market source had said.

The transaction ensured that the company was maintained as a viable going concern, able to retain its employees and meet its obligations to its stakeholders.

Besides, the transaction envisaged that sufficient capital will be injected into the company in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders.

Reposition Strategies

Soon after the repurchasing the company, DIL made fresh efforts to reposition the firm, return it to profitability and deliver returns to shareholders like others in the group. The first move was ensuring a new corporate governance strategy. In this regard, Aliko Dangote left the board, while Asue Ighodalo, a renowned corporate lawyer and Chairman of Sterling Bank Plc was appointed as its new chairman.

Also, DIL appointed Alhaji Ahmed Shehu Yakasai as Executive Director, Supply Chain and Deputy Chief Executive Officer, while Ms. Halima Dangote was appointed Executive Director, Commercial.

Addressing the shareholders of the company, Ighodalo assured the shareholders that the Board and Management of the company would continue to mitigate the effect if these challenges and would work extremely hard to turn around the fortunes of the company.

He said following the repurchase of the entire shareholdings of Tiger Brands, additional capital has been injected into the company.

According to him, “We bought back Dangote Flour Mill from Tiger Branded and by this move, it means we have a stronger, better sophisticated and more focused DFM.

“Since the takeover, we have taken a lot steps to reposition the company through expansion to drive growth. We are also using this medium to restate our commitment to increasing our shareholders value and our dear customers.”

He added: “Our processes and management have been strengthened in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders,” Ighodalo said.

The chairman, who expressed appreciation to the staff, noted that the company would continue to place high priority on their training and development, seek and retain the best the “best talents in our continued pursuit of operational and services excellence.”

He stated that the customers are the key partners in the business, who continue to remain the cornerstone of the company.

“Notwithstanding the challenges faced during the year, we continued to receive excellent patronage from our customers. We are immensely grateful for this unwavering support,” the chairman said.

He reiterated the commitments of the group to further invest in the growth of its businesses within and outside Nigeria noting that the Dangote Group believes in job and wealth creation.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Afrexim and Asoko Partner to Help List African Companies

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Afreximbank - Investors King

Asoko Insight, Africa’s leading provider of corporate data and engagement services, is pleased to announce a partnership with Africa Export-Import Bank that will help African companies list on its due diligence platform, the MANSA.

Launched by Afrexim in 2018 to counter the cuts in trade finance and investment financial flows to Africa, MANSA aims to be a single source of the primary data required for Customer Due Diligence (CDD) and Know Your Customer (KYC) checks on African entities. The transparency MANSA provides will address key trade-related challenges facing the continent, including the lack of market information, the high cost of doing business in Africa and the challenges around discovering African counterparties.

The corporate information gathered through this KYC platform provides an additional layer of confidence for international financiers and African companies seeking business partners,  unlocking the flow of capital and creating a more transparent operational landscape for trade and investment.

Onboarded as an official data partner for the project, Asoko will host access to the MANSA platform on its Digital Engagement platform through which African companies can register and submit their CDD/KYC information to be listed on the MANSA platform.

Rob Withagen, co-founder and CEO of Asoko Insight, said, “Easing access to African companies for trade and investment opportunities is at the core of Asoko’s work. MANSA is a key tool for facilitating data sharing about members of Africa’s vibrant private sector and we’re pleased to offer a route to it via our Digital Engagement platform.

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HOPE Consortium and Astral Aviation Sign MOU to Enhance Vaccine Distribution Solutions in Africa

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HOPE Consortium - Investors King

As part of its continued commitment to vaccine distribution in Africa, the HOPE Consortium has partnered with Kenya-based cargo airline, Astral Aviation, to offer vaccine distribution solutions to Africa. This highlights the HOPE Consortium’s efforts in reinforcing partnerships that focus on fighting the COVID-19 global pandemic, as well as fulfilling the organisation’s mission as a global logistics facilitator, by aiding in vaccine delivery.

As part of the partnership agreement, both entities will focus on intra-African cooperation to enhance vaccine distribution within the African continent. The HOPE Consortium will utilise Astral Aviation’s comprehensive network, technologies, and market expertise, to support its global objective of facilitating vaccine availability with a specific emphasis on the African continent. The alliance will ensure timely delivery of vaccines and critical supplies to all 54 African nations.

Astral Aviation operates a diverse fleet of 14 freighter aircraft and provides innovative, flexible, and cost-effective UAV (Unmanned Aerial Vehicle) and UAS (Unmanned Aerial Systems) integrated drone-based solutions, as well as warehousing solutions to both in-store and remote locations.

This synergetic collaboration with the HOPE Consortium will see Astral Aviation provide capacity for vaccine deliveries on its scheduled and charter freighter network, in addition to world-class drone solutions and systems to Africa, with the purpose of facilitating immunisation programmes.

Commenting on the partnership, Mr. Sanjeev Gadhia, CEO of Astral Aviation said: “We are truly honoured to partner with the HOPE Consortium and participate in the critical distribution of COVID-19 vaccines, based on our track record in performing humanitarian initiatives and vaccine flights within Africa. Astral will add further technological and warehousing solutions for distribution of the COVID-19 vaccines from the hub in Abu Dhabi, to all the 54 countries in Africa directly or via its Nairobi Hub, which occupies 9000 m2 of cold-storage facilities.”

It is worth mentioning that Astral has also been selected by UNICEF to perform vaccine flights for COVAX and for the African Union via the African Medical Supplies Platform.

Through this partnership, the HOPE Consortium furthers its end-to-end supply chains required to distribute vaccines from their base in Abu Dhabi to all African countries. The HOPE Consortium has geared its operations to transport millions of critical COVID-19 vaccines to any country in need and thus far has handled over 100 million vaccine doses across 40 countries.

Robert Sutton, Head of Logistics Cluster, Abu Dhabi Ports, said: “Africa has always been a high priority market for the HOPE Consortium, and to that end, we are pleased to join hands with Astral Aviation. With a track record of operating over 20 years within Africa, their expertise provides a new dimension towards achieving our overarching objectives. This partnership reinforces the HOPE Consortium’s aim of creating a sustainable ecosystem, based on our collective global networks, logistics and supply chain capabilities, in order to facilitate vaccine distribution across the world. Our partnership with Astral Aviation is another benchmark towards our commitment to serve every country, region, and locale. We are confident that this partnership will help enhance HOPE Consortium’s efforts in Africa and ensure that no one is left behind in the quest against the pandemic.”

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Konga Partners NIDCOM, Places World-Class Assets at Reach of Nigerians in Diaspora

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Konga

Konga, Nigeria’s leading composite e-commerce giant, has signed a partnership with the Federal Government through the Diaspora Commission to further strengthen the relationship between Nigerians abroad, their relatives and the nation.

To this effect, a Memorandum of Understanding was signed between Konga and the Nigerians in Diaspora Commission (NIDCOM) on Tuesday, September 14, 2021, in Abuja, the Federal Capital Territory (FCT).

Present at the signing ceremony was the Chairman/Chief Executive Officer, NIDCOM, Mrs. Abike Dabiri-Erewa; Chairman, Zinox Group, Leo Stan Ekeh, Co-CEO, Konga Group, Nick Imudia; Vice President, KongaPay, Isa Aliyushata as well as other senior officials of NIDCOM.

The terms of the MoU will see NIDCOM partner with Konga is offering Nigerians based in overseas locations a credible platform devoid of the potential concerns of fraud and other unscrupulous practices. Consequently, through this synergy, Konga will place its huge resources, extensive reach, world-class assets and credible database at the disposal of millions of Nigerians in the Diaspora in search of a reliable and robust platform to work within the country.

In addition, the partnership will see Konga set up an exclusive Diaspora Marketplace to aid Nigerians abroad gain access to quality Nigerian products and services, while also helping them sell their own items locally. Furthermore, NIDCOM will also leverage Konga TV, a cutting-edge Cloud TV soon to be launched by the e-commerce giant, to reach millions of Nigerians across the globe.

The development is one which the FG believes will ease capital flight, while also boosting the scope of useful foreign exchange earnings through Diaspora returns.

‘‘We are delighted to have signed this partnership with Konga which remains unarguably a world recognized and credible e-commerce leader in Nigeria,’’ disclosed Hon Mrs. Abike Erewa, NIDCOM Executive Chairman. ‘‘Through this initiative, millions of Nigerians will have access to a reliable platform here in Nigeria to guide their investment decisions, while also offering them a chance to empower their loved ones through the numerous opportunities that abound on KongaGroup. We are also confident that this partnership will encourage many Nigerians resident abroad to gain useful knowledge and consider major social investments in Nigeria, a development that will further rub off positively on the economy.”

Also speaking at the event, Ekeh, Chairman of Konga commended the NIDCOM Chairman and her team for their efforts and professionalism in making the partnership a reality. Ekeh, who pioneered e-commerce in Africa through the now-defunct BuyRight Africa Dotcom over 13 years ago, lauded the power of e-commerce in bridging gaps and growing the wealth of nations in the 21stCentury, a role he stated that Konga is eminently positioned to play in view of its huge resources and growth trajectory in Nigeria and beyond. He added that the partnership is expected to cause a change that would be a blessing to Nigerians in the 21st century.

On his part, Imudia, Co-CEO, Konga Group also stressed the many opportunities that abound for Nigerians in the Diaspora through the partnership with NIDCOM.

‘‘The opportunities are huge.

‘‘Many Nigerians abroad can now find credible merchants for their purchases in Nigeria or even set up their own stores on Konga. Also, they can access reliable information before committing funds or while making investment decisions. With Konga, Nigerians abroad can afford to extend support to relatives and their respective communities without stories.

‘‘Put simply, Nigerians abroad can order foodstuffs, medicines, and other products on Konga platforms and get them delivered to their families and friends without stories, no matter the location in Nigeria. All they need do is open a wallet on KongaPay, a Central Bank of Nigeria fully licensed mobile money platform. They can also use the Konga platform to pay school fees, monthly feeding allowances and pay contractors working for them in Nigeria, etc. and receive alerts that their instructions have been carried out with 100% accuracy.’’

The partnership with NIDCOM comes just as Konga recently signed off on another partnership with the Ministry of Youths and Sports Development to empower millions of Nigerians youths through a job and wealth creation scheme known as Konga Jobs (KJ). The initiative targets the employed, under-employed and unemployed Nigerians. Konga also recently entered a strategic partnership with the Edo State Government to launch the Edo Marketplace(EMP) on Konga as a major platform to take SMEs in the state to the global marketplace and to better serve the unreached and under-reached.

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