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Moulders Increase Block Prices, End Strike Today

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Block Moulders

Block moulders in the country have concluded plans to raise the prices of blocks by between 11 per cent and over 30 per cent, following the recent increase in the prices of cement.

The new price regime for blocks is expected to come into effect immediately after the moulders call off their five-day strike on Friday (today).

The announcement came on Thursday just as the Chairman, Cement Company of Northern Nigeria Plc, Mr. Abdulsamad Rabiu, said the high cost of doing business in Nigeria was a major reason for the hike in the prices of cement.

The price of cement had last week risen from N1,500 per 50kg bag to between N2,400 and N2,500.

On Tuesday that the moulders suspended operation the previous day to protest the latest increase in the prices of cement, granite and other construction materials, with a hint of their plan to raise the prices of blocks unless the prices of cement and other moulding materials were reversed.

The President, National Association of Block Moulders of Nigeria, Alhaji Rasco Adebowale, said on Thursday that with the new price regime, the 6x9x18 load-bearing blocks would sell for N220 per unit, accounting for a 37.5 per cent increase over the previous price of N160.

The 9x9x18 load-bearing blocks will sell for N250 per unit, up from N220, while the 6x9x18 and 9x9x18 non-load bearing blocks will sell for N200 and N180, up from N180 and N160 per unit, respectively, according to him.

He said, “NABMON, rising from its one-week break in production and sales, has made recommendations on quality control and new prices for our products.

“In view of the incessant building collapse nationwide, private block moulding activities without the knowledge, supervision and control of the association are hereby prohibited. All members of the association have also been enjoined to comply with standards and quality to justify the new prices.”

A professor of Building at the University of Lagos and the Vice-Chairman, Council of Registered Builders of Nigeria, Martin Dada, said the new price regime was a reaction to market forces but added that it would pose a challenge to the building industry and the economy in the long run, if it was not reversed.“We know that this is not a good omen for the economy. The challenge is that there is no assurance that the blocks will retain quality. So, we are already courting danger for the future,” he said.

He said the rise in the prices of cement and its ripple effects on the housing sector in particular, and the economy in general, would increase cases of building collapse in the country.

Dada said, “We should now be thinking not just of buildings collapsing and killing people during construction but also the lifespan of our buildings. Will they last beyond 10 years with these developments?”

The immediate past President of the Nigerian Institute of Building, Mr. Tunde Lasabi, said the affordability aspect of housing in the country might no longer be possible with current developments.

“Cement and blocks are basics in construction, so when their prices rise, definitely the prices of houses will increase. So, the affordability aspect of housing now has a question mark attached to it,” he said.

Lasabi said the government needed to consider the reality of affordable housing by subsidising the price of cement.

“With our 17 million housing deficit, the government should begin to think of subsidising cement and cement manufacturers should also reconsider their stance on pricing,” he said.

The Chairman, Cement Company of Northern Nigeria Plc, Rabiu, while speaking at the company’s 37th Annual General Meeting in Abuja, said that the operating environment had become harsh on businesses with a lot of challenges on the real sector.

Specifically, he listed some of the challenges as shortage of energy, limited foreign exchange for spare parts and low demand for cement.

He said while the government was mindful of the challenges facing the sector, the drop in oil prices, which had resulted in a decline in revenue accretion to the federation account, had limited the government’s capacity to address the problems.

He said,”The situation is tough; the price of energy, which accounts for a huge part of our operating costs, has doubled.

“The foreign exchange rate has also increased compared to what it was a few months back and all these are impacting negatively on our operations.”

He, however, said despite the harsh operating environment, the management of the company would continue to strive for better shareholders’ value.

Speaking on the company’s financial performance, he said the CCCN recorded a turnover of N13.03bn for 2015 as against N15.1bn recorded in 2014.

The profit after tax, according to him, was N1.2bn in 2015 as against N1.9bn in 2014.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Business

Boeing to Deliver 50 737 MAX Planes to British Airways

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American Airlines Boeing

International Airlines Group (IAG), the owner of British Airways, on Thursday said it has agreed to purchase 50 Boeing 737 MAX planes. The transaction estimated at $6.25 billion includes a substantial discount and is expected to be delivered between 2023 and 2027, according to a statement issued by the company.

In the statement seen by Investors King, Luis Gallego, the Chief Executive of IAG, said “The addition of new Boeing 737s is an important part of IAG’s short-haul fleet renewal.”  

“The deal falls short of a blockbuster non-binding commitment for 200 737 MAX jets placed under former chief executive Willie Walsh at the Paris Airshow 2019 that was a welcome lifeline to Boeing when the model was grounded after two fatal crashes.

“But the firm 737 MAX 10 order from a top-tier customer is an important signal to the market at a time when Boeing faces an increasingly high-stakes battle to win certification of the largest MAX variant before a new safety standard on cockpit alerts takes effect at year-end.”

Boeing’s financial health rests on the resumption of deliveries of 787 Dreamliners and clearing MAX inventories, company executives and analysts have said.

Former IAG’s Chief Financial Officer, Steve Gunning revealed to analysts in November that the airline group would need some additional short-haul aircraft towards 2024 or 2025 and hinted that any order would include the 737 MAX.

IAG, owner of Ireland’s Aer Lingus and Spain’s Iberia and Vueling in addition to British Airways, also has a further 100 purchase options as part of the deal, which is subject to shareholder approval.

IAG is one of the world’s largest airline groups, with a fleet of 531 aircraft. Before the impact of the COVID-19 pandemic it operated to 279 destinations and carried around 118 million passengers each year.

It is a Spanish registered company with shares traded on the London Stock Exchange and Spanish Stock Exchanges.

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Business

CISLAC Campaigns For Tobacco Tax Hike

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British American Tobacco

The Federal Ministry of Health, Civil Society Legislative Advocacy Centre (CISLAC) has called for a campaign to raise tobacco tax. The aim of this advocacy is to generate income for the health sector and save the lives of Nigerians.

Executive Director, CISLAC, Mr Auwal Rafsanjani said the measure would provide Nigeria with a win-win situation by lowering tobacco product affordability while generating income for development funds. He said that the detrimental effects of tobacco usage had prompted countries such as Nigeria to enact tobacco control measures to reduce tobacco consumption and cost.

“Excise taxes are the most effective tax measure for promoting health because they change the price of a harmful product relative to other goods and can be easily increased over time. Consumption is reduced best with taxes based on specific taxes on unhealthy products such as sticks and packs of cigarettes.

“Closely linked to the issue of tobacco taxation as a control tool, is the issue of safeguarding population health. It is not news, however, that the state of health care delivery in Nigeria remained very abysmal while the world intensified efforts to attain the Sustainable Development Goals,” he said.

Recall that Investors King had earlier reported the World Bank’s call to the Federal Government of Nigeria, urging the government to impose special taxes on alcohol, cigarettes and beverages that are highly sweetened in order to improve primary healthcare conditions in the country.

Investors King gathered that, Shubham Chaudhuri, the Country Director for Nigeria in the World Bank Group, said that an improvement in healthcare in Nigeria will come by taxing the things that are “killing us.” He said that the economic rationale for the action is quite strong if lives are to be saved and a healthier Nigeria achieved.

According to Rafsanjani, African nations convened in April 2001 to address health-care finance issues, which are one of the primary determinants of Universal Health Coverage (UHC), and decided to set aside 15% of their budget for health.

“As the country defaults on budgeting effectively for health, countries of the world are adopting innovative approach to mobilise resources for health financing which is adopting tobacco taxes as an alternative strategy”, he noted.

The study, according to Rafsanjani, was commissioned to investigate the potential of tobacco taxation as a form of income for Nigerian health financing.

He explained that the study’s goal was to give scientific information to help policymakers formulate better policies as Nigeria battled to close the gap in health funding.

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Merger and Acquisition

Access Holdings Plc to Acquire Majority Stake in First Guarantee Pension Limited

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Herbert Wigwe - Investors King

Access Holdings Plc has agreed with First Guarantee Pension Limited to acquire a majority stake in the company in its drive to transform from a narrow banking business into a financial service company.

The leading financial institution stated in a press release obtained by Investors King on Thursday.

According to Access Bank, the transaction is in line with its strategy to evolve into a full-blown financial services company and gain relevant market share across Africa, global monetary centres and beyond banking verticals.

Speaking on the firm’s push to change the banking landscape, Dr. Herbert Wigwe, Group Chief Executive Officer, Access Corporation said “This transaction is a natural evolution for us. Over the last 20 years, we set our sights on and delivered ambitious plans to transform the African financial services landscape focusing on banking and have created the African leading Bank and largest bank by customer base.

“This large customer base both on the wholesale and retail segments makes the pension business a natural fit for the Corporation given its objective of ecosystem optimisation. We will leverage our well-established culture of strong corporate governance, risk management, cutting-edge technology, and digital capabilities to deliver high standards of professionalism in the management of pension assets to the benefit of our stakeholders.”

The firm added that the National Pension Commission and the Central Bank of Nigeria have given their no objection to the transaction.

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