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Dangote, Sinotruck to Roll Out Trucks Assembled in Nigeria Next Week

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Economic Diversification
  • Dangote, Sinotruck to Roll Out Trucks Assembled in Nigeria Next Week

Africa’s richest man Aliko Dangote, in partnership with China’s heavy duty truck group, Sinotruck, is to roll out first assembled-in-Nigeria trucks next week, the Dangote group said on Wednesday.

The Executive Director of Dangote Group, Edwin Devakumar, said in Lagos that the $100m plant would assemble cars soon.

He said, “It aims to meet an expected increased demand for transport in the country as the government focuses on boosting agriculture and farmers need to move goods across the vast country.

“[The Dangote Group] has a fleet size of 12,000 trucks and large users. One of the biggest challenges in the market today is logistics because we do not have a proper transport network.

“The joint venture, which is 65 per cent owned by Dangote and 35 per cent by Sinotruck, will assemble components and knocked down parts imported from Sinotruck to the Nigerian plant.”

He said the plant had the capacity to assemble 16 trucks a day and would export to West Africa, adding that the facility would expand into vehicle manufacturing.

Last March Dangote bid for a majority stake in Peugeot Automobile Nigeria. The results of the sale have not yet been released.

Turning to Dangote’s other interests, Devakumar said the group was on track to launch its $17bn oil refinery plant with the first crude for processing going into the plant in October 2019.

He said, “It will handle 650,000 barrels per day.

“The company will scale down operations in its flour milling, sugar refinery and tomato processing businesses however, due to dollar shortages to fund the import of raw materials.

“Where the foreign exchange is not available we are cutting down our operations.

“For example, we had a vegetable oil refinery we have shut down; we had a tomato based processing plant we have shut down.”

Dangote’s cement business was continuing as its main raw material – limestone – could be sourced at home.

He added the firm commissioned a new cement plant in Sierra Leone last week and expected a plant in Congo to begin production this year.

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.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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