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‘Manufacturers Can’t Survive 20 to 30% Interest Rate’

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  • ‘Manufacturers Can’t Survive 20 to 30% Interest Rate’

Sona Agro Allied Foods Limited, a biscuit manufacturing company and subsidiary of Sona Group of Industries, has exported its products to Ghana and other West African countries. In this interview with OKWY IROEGBU-CHIKEZIE, its Chairman, Mr. Arjan Mirchandani, says the company achieved this feat because it sources over 90 per cent of its raw materials locally. He also says there is a need to encourage indigeneous industries with cheaper funds and favourable policies, urging the government to engage more with local manufacturers.

What is the significance of the inauguration of Sona Agro Allied Foods export?

The significance it supports the government’s policy on backward integration and local farmers. It is important to help farmers. We believe they are the future of this country. We also believe that aside farmers, Nigerians can decide their future. It is not the business of any foreigner to decide the future for Nigerians. Foreigners could bring investments, technology and all the talents to make sure goods produced here are comparable to those from Europe and the United States, so that at the end of the day, one can take the products to other markets not only within Africa. It is necessary to look at the opportunities. This is one of the reasons we started this journey using local raw materials.

We started with just two containers for export, which in our estimation equals 200 containers, because when one has faith and takes a step at a time, one will reach one’s goal. Nigeria has an opportunity to grow, and to replace all imports with locally-manufactured goods and save foreign exchange. We cannot rely only on oil money. When you have too much of oil money, people get spoilt; when you have little, you start looking at what you have at home. Thus, taking one step is better than not starting at all.

What drives you as a businessman?

Every step we have taken has been guided by God. It is also our belief that you don’t ask your country what it will do for you, but what you can do for it. We make sure that we do our part for the society.

Many companies have been affected by the economic downturn, with some either downsizing or producing at less than installed capacity. What has been your solution to this crisis?

Probably, companies that are downsising were not able to get their acts together. Banks are also not helping the sector as their interest rates are between 20 and 30 per cent, which no manufacturer can survive on. With an interest rate of that nature, no business can survive. In India and other countries, interest rates are two, three or four per cent maximum. In Switzerland, you will get money at one per cent rate. When you have cheap money, you are encouraged to invest more. Nevertheless, we are still expanding, with no reason to downsize and deny workers their livelihood; we are doing everything possible to keep our staff even in the toughest season.

How do you comply with quality standards, especially getting certification from the regulatory bodies?

We adhere to quality standards in our production processes and have obtained certification from the International Organisation for Standardisation. We have complied with all the regulations from the Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC) and other government agencies. We are a responsible company and we are encouraged, despite the situation which makes us to be bringing in newer technologies. We are working with the Bank of Industry (BoI) and the International Institute of Tropical Agriculture to achieve this. We are grateful to some of these government agencies because they encourage growth in investments. If the cost of funds is not made cheaper more industries will die in Nigeria. I don’t believe that should mortgage the future of the country. We should encourage local industries that source raw materials locally. Nigeria got her independence in 1960, but we are not free until we are free by being self-sufficient. We need to start immediately.

How should the government assist investors?

We want the Federal Government to make cheaper loans available for the industries. We also believe that government officials should visit industries more often and encourage them, especially during moments of difficulties. It is the duty of every one of us to join hands together to grow Nigeria. That is why we think the Federal Government needs to engage manufacturers and ask them what their problems are. We have written many letters but we don’t get response from the government and this is very unfortunate. At Sona Group of Companies, we are producing with 100 per cent local raw materials, yet the Federal Government allows people to import commodities that can be sourced locally and they are charged only five per cent duties. For instance, some people are importing sorghum when we have enough of it in the country. We need to make policies to support local companies.

What are your investment plans?

At Sona Agro Allied Foods, we’ll like to see 100 per cent capacity utilisation. In the next 15 months, we are hoping to grow by 200 per cent. We feel that import reduction and government’s policies are helping to grow the industries and so automatically, employment will grow and the ordinary Nigerians will be proud that he is contributing to the growth of the economy. We have thousands of vibrant Nigerians in our work force and they are doing well.

What efforts are you making to ensure proper branding of your products to make them more acceptable in the market?

Great products are made of great quality. If you don’t do quality but you have great packaging, you won’t sell. The customer must get value for his money. Our belief is that people must get value for their money. That is important for us and we have obligation to our customers. We are also not relenting in our efforts to promote the products by building awareness.

What is unique about your products?

We are not doing anything extraordinary, but one thing I know is that when you produce quality goods, you don’t have to show off. Consumers themselves will determine what the market of the products should be.

Which of your subsidiaries is your flagship and what are the different market shares of your firms?

There is no discrimination in our organisation. Our industry is viable based on availability of local raw materials. I am all for it and I will do whatever it takes to replace imported products. Daily, we put millions of products into the market and we make sure that no problem or complaint comes to us because of our products. And we also pay close attention to our customers because we believe that the customer is always right and we ensure we give them value for money.

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.

Energy

Equatorial Guinea to Launch Vision on Post-COVID Energy Transition Plans with Report and Film

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The Africa Energy Series (AES): Equatorial Guinea 2021 campaign – comprising a report and a documentary – will serve as a critical tool to navigate the energy investment landscape in one of Africa’s more mature petroleum producing markets; Equatorial Guinea has largely been able to sustain its pace of engagement with global investors in the face of COVID-19, forecasting $1.1 billion in FDI in oil and gas activities in 2021; The third edition of the AES: Equatorial Guinea 2021 report will be released at Africa Oil & Power’s U.S. Africa Energy Forum 2021 networking event in Washington, D.C. this July.

Africa Oil & Power is proud to announce the upcoming launch of its Africa Energy Series (AES): Equatorial Guinea 2021 investment report and documentary, as part of a multimedia campaign set to champion the domestic energy sector and shape the West and Central African energy narrative.

The dual-language publication will target key developments driving a post-COVID-19 recovery in Equatorial Guinea – namely, the growth of petroleum and power industries; regional gas monetization initiatives; a clean energy transition; the impact of environmental, social and governance criteria; and expansion of the national diversification agenda.

A 30-minute documentary will provide a visual complement to the publication, featuring first-hand interviews with government officials, private sector players, industry regulators and energy experts discussing Equatorial Guinea’s unparalleled ambition and future plans.

“From spearheading regional gas monetization initiatives to drilling new exploration wells as early as Q2 2021, Equatorial Guinea continues to cement its reputation as a progressive, dynamic force on the African energy stage,” said H.E. Gabriel Obiang Lima, Minister of Mines and Hydrocarbons. “The Africa Energy Series publication in conjunction with a detailed documentary format, gives us the voice to showcase the depth of our full-stream investment opportunities to a global audience.”

Since the onset of COVID-19, Equatorial Guinea has been proactive in safeguarding opportunities for foreign investors and continuing to drive capital into its hydrocarbon resources. In February, Chevron achieved first gas flow from the successful execution of its Alen Gas Monetization project, a $475-million investment representing the first phase of Equatorial Guinea’s Gas Mega Hub masterplan.

The Ministry of Mines and Hydrocarbons is currently promoting several capital-intensive projects – including the construction of modular oil refineries, a gold refinery, liquefied petroleum gas strategic tanks, a urea plant and the expansion of a compressed natural gas project – which are open for investment. Last December, the Ministry of Mines and Hydrocarbons announced a forecast of $1.1 billion in foreign direct investment in oil and gas activities in 2021.

Active in Equatorial Guinea since 2015, AOP released its first AES documentary on the country in 2016, followed by investment reports in 2018 and 2019.

The AES: Equatorial Guinea 2021 investment report will be launched at the U.S. Africa Energy Forum 2021 online seminar and in-person networking event in Washington, DC. (July 12). The documentary will be launched at the U.S. Africa Energy Forum conference in Houston (October 4-5) and broadcast globally on news networks.

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U.S. Africa Energy Forum 2021 Launches: Promotes U.S. Role as Primary Investor in African Energy

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The U.S. Africa Energy Forum 2021 – organized by Africa Oil & Power, in partnership with the African Energy Chamber’s U.S.-Africa Committee – will foster alignment between U.S. and African governments’ energy policies and highlight African oil, gas, power and renewable projects across the energy value chain for U.S. investors; the multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions that drive long-term policy formation and project execution; the in-person, two-day summit and gala dinner will be hosted in Houston, Texas (October 4-5, 2021) and an online seminar and in-person networking event will be held in Washington D.C. (July 12).

Africa Oil & Power (AOP) and the African Energy Chamber are excited to announce the launch of the first-ever U.S. Africa Energy Forum (USAEF). This event aims to create deeper cooperation between the U.S. and Africa on energy policy, to reach alignment on long term sustainability goals, to stimulate greater American investment in the African oil, gas and power sectors, and to engage and reposition the U.S. as the primary partner of choice for African energy developments.

Under the theme “New Horizons for U.S. Africa Energy Investment” the forum will explore diverse foreign investment and export opportunities across the continent, including natural gas as a vital fuel for the energy transition; energy storage and battery minerals; Africa’s place in global energy supply chains; the benefits of the African Continental Free Trade Area; evolving energy technologies and how they relate to the future role of petroleum resources; and on-and off-grid power developments.

An online seminar and in-person networking event will be held in Washington D.C. on July 12, 2021, building up to the in-person U.S. Africa Energy Forum summit and gala dinner, to be hosted in Houston, Texas, on October 4-5, 2021. Africa Oil & Power and the African Energy Chamber invite all U.S.-based companies with an interest in engaging with African industry leaders and project developers to participate in the USAEF Houston summit.

This initiative comes at an important juncture in U.S.-Africa relations. The Biden Administration’s announcements of its intentions to proactively build a stronger U.S.-Africa partnership coincides with the fact that African projects are seeing rising interest from U.S. companies and lending institutions alike. The USAEF event is thus dedicated to enabling dialogue between its participants that advances these developments.

“Our mission has always been to showcase the resource potential that Africa has to offer while at the same time showing its growing preference for sustainable energy policies and technologies. Toward that end, we hope it becomes evident that Africa does not just want investment capital: it wants smart capital and an accompanying partnership with the investors,” says James Chester, Senior Director of Africa Oil & Power. “The U.S. Africa Energy Forum represents the first-of-its-kind opportunity to catalyze U.S. participation in Africa’s energy transformation – via technology, policy support, capital injection and skills development – and turns a new page in the chapter on global energy investment.”

In partnership with the African Energy Chamber’s U.S.-Africa Committee, AOP will introduce American companies to African opportunities and advance an agenda of sustainable, long-term investment in African energy and other sectors by U.S. organizations.

“The rise in support from the U.S. to the continent is a credit to Africa itself, which is increasingly viewed as a favored destination for global investors, multilaterals and export credit agencies,” says Jude Kearney, President of Kearney Africa and former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration. “Africa continues to command a healthy share of global FDI in oil and gas industries. It has for decades shown that investment in those sectors is favorable compared to other jurisdictions and can be successful by many measures. Even as Africa and the rest of the world wrestles with a global pandemic, Africa’s energy sector shows vitality and resiliency – not only in hydrocarbons but in regard to new opportunities in mining, liquefied natural gas, and agriculture.”

Both African governments and private sector sponsors of African energy projects value highly the combination of investment and partnership that US investors famously convey. The USAEF seeks to enable successful partnerships between its participants such that the energy development goals of U.S. investors and strategic partners and their African counterparts can be achieved.

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Angola’s Petroleum Agency Outlines Timeline for Ongoing Bid-round

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Angola’s National Oil, Gas and Biofuel’s Agency (ANPG) has outlined its timetable for the evaluation of its ongoing 2020 bid round, as interest in the acreage on offer continues to grow.

In line with its statutory duties as national concessionaire in charge of the attribution of petroleum exploration blocks, the ANPG has sought to adjust its processes to remain competitive in the current market environment, which is dominated by concerns around COVID-19, long-term demand considerations and stiff competition from new and promising frontiers like Guyana and Suriname.

The ongoing bid-round is a manifestation of Angola’s strategy for the continuous attribution of petroleum concessions 2019-2025 which was approved and codified by Presidential Decree no. 52/19, of 18 February 2019. The aim of the strategy is to provide access to promising acreage to competent explorers in an effort to increase geological knowledge about Angola’s hydrocarbons potential and ultimately increase proven reserves.

A hybrid online and physical roadshow for the current bid-round is scheduled for April 6 in at the Talatona Convention Centre in Luanda. This event will provide the opportunity for investors to engage with the agency regarding the blocks on offer, the data packages and the accessibility studies, as well as touch upon environmental, logistical and local content issues.

This will kickstart a series of both digital and in-person roadshows and technical presentations to promote the blocks to be awarded in key international markets. The acreages on offer include:

  • Three blocks of the lower Congo onshore Basin CON1, CON5 and CON6
  • Six of the Kwanza onshore Basin (KON5, KON6, KON8, KON9, KON17 and KON20)

In line with the provisions of Presidential Decree No. 86/18, of 2 April 2019, which establishes the rules for the organization of bid rounds, the ongoing 2020 bid round will unfold as follows:

  • Tender Launch
  • Proposal submission
  • The opening of offers from potential suitors in a public setting
  • The evaluation and qualification of proposals
  • The submission of the evaluation report to the Ministry of Mineral Resources and Petroleum and Gas
  • Contract negotiation with the winners of the bid-round
  • Signature

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