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Manufacturing Sector Faces Gale of Losses

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forex
  • Manufacturing Sector Faces Gale of Losses

The manufacturing sector is faced with myriads of problems ranging from the scarcity of foreign exchange (forex), high-interest rate and cost of raw materials, unfavorable policies among others, as the bottom-line of the listed equities, especially in the last financial year have remained susceptible to the harsh operating environment facing the agri-business in Nigeria.

Indeed, the most affected was the share price of these firms on the Nigerian Stock Exchange, which had remained stagnated at nominal value year to date following investors’ apathy that have negatively impacted on the demand of the stocks.

The sector is expected to be drive the nation’s economy but as sales revenues and profits decline, manufacturers will cut back on hiring new employees, or freeze hiring entirely. In an effort to cut costs and improve the bottom line, the manufacturer may stop buying new equipment, curtail research and development and stop new product rollouts.

Expenditures for marketing and advertising may also be reduced. These cost-cutting efforts will impact other businesses, both big and small, increase cost of goods and impede economic growth.

For instance, FTN Cocoa Processors Plc, a pioneer status agro-allied company, which came from a loss after tax of N201.195 million for the full Year 2015, also began the 2016 financial in the red, recording a loss after tax of N62.568 million for the first quarter (Q1) ended March 31, 2016.
The figure showed a loss of 1,793 per cent from N3.695 million profits after tax reported in the comparable period of 2015.

The company’s revenue declined by 12 per cent from N387.972 million in 2015 to N341.441 million recorded during the period under review.

The firm maintained its loss position during the half year, as it reported a loss after tax of N151.141 million for the second quarter ended June 30, 2016. The figure accounted for a 310.8 per cent change from N39.065 million losses after tax reported a year ago.

The company’s revenue however, grew by 17.9 per cent from N562.286 million in 2015 to N662.964 million recorded during the period under review.

The Cocoa Processors also ended the third quarter with a loss after tax of N263.352 million for the Q3 ended September 30, 2016, as it continued to struggle with harsh operating environment and declining bottom-line.

The figure showed a 70.1 per cent change from N154.793 million loss after tax compared to 2015.

The company’s revenue in a filing with the Nigerian Stock Exchange, however, declined by 2.5 per cent from N863.837 million in 2015 to N842.139 million recorded during the period under review.

Similarly, Meyer Plc, for the Q3 ended September 30, 2016, recorded N71.73 million loss.

Specifically, the firm posted a loss before tax of N67.7 million, representing 112.6 per cent loss, with a loss after tax of N71.73 million.

The firm’s net assets stood at N613.6 million, 10.5 per cent slide, when compared to N685.3 million in 2015.

PZ Cussons Nigeria Plc also reported a loss after tax of N2.43 billion in its Q1 report for the period ended August 31, 2016

The company posted a loss before tax of N1.58 billion in the review period, while revenue increased 12 per cent to N16.75 billion from M14.95 billion recorded the same period of 2015.

To address the plight of the manufacturers, especially in the areas of foreign exchange stability and boost their share price on the Exchange, industrialists have appealed to the Federal Government to review the forex policy and ensure that there is liquidity in the market.

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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How to Check Your Nirsal Loan Approval

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Loan - Investors King

Here is a step-by-step walk-through on how you can check your NIRSAL COVID-19 loan approval by NIRSAL Microfinance Bank.

How to Check NIRSAL Loan Status

To check your NIRSAL loan approval or access the NIRSAL loan portal, you must have applied for the COVID-19 relief loan for small businesses and individuals when the application was on. If you applied, carefully go through your email address to check if you received an email from NIRSAL Microfinance Bank indicating you have been approved for the loan.

Do not be panic if you could not find the email sent to successful applicants as you can still check by clicking here or copy https://covid19.nmfb.com.ng/ to your browser.

Then select the category you applied for, SME or Households loan. The next stage is to input your Bank Verification Number (BVN).

How to Check NIRSAL Loan Approval With BVN

All applicants are required to verify their accounts by entering their Bank Verification Numbers (BVNs). After inputting your BVN, a window will pop up showing you the amount you were approved for if your application was successful.

The next step is to claim your loan by providing your bank account information in the correct format as specified on the portal.

Please proceed to the final step and read the terms and conditions of the loan you just secured. The name of the director in charge of your payment, his/her details and repayment procedure will be clearly stated.

Please note that 5 percent of the total amount will be deducted from the loan before disbursement and you are expected to pay it back, contrary to popular notion.

Ensure not to default on repayment, make sure repayment is done within the stipulated three-year time frame. Finally, note that since your BVN is linked to all your accounts, if you fail to repay, you will be continually debited monthly until you pay the complete amount.

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Dangote Cement Boosts Sub-Saharan Africa’s Economic Development

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Dangote Cement - Investors King

Operating in 10 African countries, Dangote Cement has significantly boost Sub-Saharan Africa Economic Development and play major roles in attracting Investors and job creation.

Sub-Saharan Africa is populated by more than half a billion people, and rapid urbanisation is creating challenges in the areas of housing, roads, railways, power supply, dams and water pipelines – aspects of infrastructure that are critical to the well-being of the population.

This situation indicates that cement and concrete will play a major role in construction technology in Africa, an aspect that makes the continent an attractive destination for investors.

The Dangote Group has taken cognizance and advantage of the cement demand in Africa by investing in 10 sub-Saharan counties like Nigeria, Senegal, South Africa, Cameroon, Ethiopia, Tanzania, Zambia, Ghana, Congo, and Sierra Leone.

Remarkably, the Dangote Cement plant has successfully operated in Senegal in the last five years, producing 32.5 and 42.5-grades, thereby offering the domestic market higher-quality cement at competitive prices.

The company’s 1.5Mta factory located in Pout, about 60km from Dakar, was commissioned at the end of December 2014 to take advantage of the geographical strategic location, strong demand and abundant limestone deposits.

Country Manager, Dangote Cement, Senegal, Luk Haelterman, said: “before our entry, the domestic market was almost entirely made up of 32.5-grade cement. Our plant produces 42.5-grade cement, thereby offering the market higher-quality cement at a competitive price, which the construction industry urgently needs.”

Dangote Cement Senegal’s integrated plant is modern, fuel-efficient that uses the latest technology to produce high-quality cement. This enables the company to compete very effectively in a Sub-Saharan cement industry that is fragmented and characterised by smaller-scale operators with older technologies.

Haelterman described Dangote Cement’s investment in Senegal as one of the biggest foreign direct investments by an African company, which is an indication of its strong belief in the future growth of its economy.

He said the market has potential for growth for both local consumption and export, despite being saturated by other cement brands, saying, “apart from capturing the local market in Senegal, we also now export cement to neighbouring countries of Mali, The Gambia and Guinea-Bissau.”

Haelterman attributed the company’s outstanding performance in Senegal to stringent quality assurance processes, which were deployed to ensure that customers get high-quality products that meet all the required technical standards.

According to him, Dangote’s introduction of the 42.5-degree brand of cement to the major market in Senegal upon entry has enabled the company to gain the desired market share in the country.

Luk also disclosed that Dangote Cement Senegal has developed a culture of supporting local employees and prioritising local hiring, which allows local country employees have the necessary knowledge, experience, and support to take up key roles within the company.

He said the policy aims to gradually reduce the number of expatriates employed by the business by enhancing the skills and capacity of Senegalese employees to take up leadership positions.

“We have ensured that our image has been aligned with two key principles from day one: maintaining high quality, and taking a local approach in everything that we do,” he said.

Human resources manager, Dangote Cement, Senegal, Waly Diouf, said the company takes training and development of employees as a priority. “Today, Dangote Senegal has about 800 employees. We make sure that we invest heavily in the training and development of employees. We have a programme, which enables us to boost the skills of local staff at all levels. Dangote Cement Senegal is one of the best plants in Africa. This consistent training of indigenous manpower has made our plant one of the best in Africa ” he disclosed.

Chief finance officer, Dangote Cement, Senegal, Ousmane Mbaye, said the company has contributed significantly to the development of Senegal’s economy, saying, “Dangote Senegal started operation in Senegal in 2015, and between 2015 and 2019, the company has contributed heavily into the Senegalese government treasury, thereby assisting in economic development.”

Head of mines, Dangote Cement, Senegal, Leyti Ndiaye added that “our job is to supply raw materials to the plant and make sure that blending of the limestone is done correctly. We operate under very strict environmental regulations. As a company, we have a sustainable environment management plan so as to reduce environmental degradation during operation as well as restoration of degraded lands after final mine closure.”

Chief executive officer, National Sector Mining Company, Ousmane Cisse commended Dangote Cement for investing massively in the Senegalese economy. “I am very proud to have Dangote Cement in Senegal. Dangote has been able to satisfy the Senegalese cement market since its inception in 2015. When Dangote arrived here, there were two players in the market. Dangote brought quantity and quality products through the introduction of 45.2R. Dangote has helped cement consumers in Senegal to access quality cement products.

“The company is also satisfying markets in the surrounding countries. When you visit Dangote, you will discover that most of the employees are Senegalese. The company has employed Senegalese and ensure adequate capacity building for everybody,” he stated.

The best practices adopted by the Dangote Cement Senegal Plant over the past five years have boosted its production process and quality of its products, with a corresponding positive impact on the economy of the country, Sub-Saharan Africa and the continent as a whole. This is a plus for development.

Dangote Cement has a production capacity of 48.6 million tonnes per year across 10 countries in Sub-Saharan Africa. The Group has integrated factories in seven countries, clinker grinding plant in Cameroon, and import and distribution facilities for bulk cement in Ghana and Sierra Leone. Together, these operations make the Group the largest cement producer in Sub-Saharan Africa.

Based in Nigeria, the Group operates in many of Sub-Saharan Africa’s key cement markets, helping the continent become self-sufficient in this basic commodity. In 2020, it started shipping clinker to West and Central Africa from Nigeria. Its regional strategy stated that it look for markets that have ample limestone, thriving economies, growing populations, and a pressing need for housing and infrastructure.

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Arla Food To Set Up Dairy Farm In Nigeria, Train 1,000 Dairy Farmers

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Arla Foods- Investors King

Arla Foods, makers of Dano Milk, has announced that it will build a state-of-the-art commercial dairy farm in Northern Nigeria where it plans to train and support up to 1,000 local dairy farmers as part of its long-term commitment to developing the Nigerian dairy sector.

The 200-hectare farm, scheduled to open in 2022, will have housing for 400 dairy cows, modern milking parlours and technology, grasslands and living facilities for 25 employees.

The firm said the farm is expected to produce over 10 tonnes of milk per day to supply locally produced dairy products to Nigerian consumers.

Managing Director, Arla Foods, Peder Pedersen said “there was a great need for nutritious food and dairy products to satisfy the growing demand from Nigeria’s fast-growing population.”

“This requires a complementary approach where imported food is crucial to ensuring food security while also supporting the government’s long-term agricultural transformation plan to build a sustainable dairy sector in Nigeria,” Pedersen said.

In 2019 Arla scaled up its commitment to developing a sustainable dairy sector in Nigeria with a new public-private partnership with the Kaduna State government.

It is the first of its size and offers 1,000 nomadic dairy farmers permanent farmlands. Arla is the commercial partner that will purchase, collect, process and bring the local milk to market.

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