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Nigeria’s FMCG Industry Loses N38 Billion

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consumer goods
  • Nigeria’s FMCG Industry Loses N38 Billion

A data collected from the Nigerian Stock Exchange (NSE) has revealed that 12 companies of Fast Moving Consumer Goods (FMCG) industry suffered a N38.02 billion decline in profit in 2018 financial year.

It was observed that some of the companies deal in import items restricted for foreign exchange by the Federal Government through the Central Bank of Nigeria in 2015.

The loss suffered by these listed companies may, therefore, be linked to the CBN’s restriction to Foreign Exchange access on their imports.

The CBN Governor, Godwin Emefiele, had said the restriction was meant to improve domestic production of the items as well as the reduction in Nigeria’s import bill in addition to ensuring the stability of the Foreign Exchange Market.

Regardless of the restriction, some of the companies witnessed profit fluctuations; the profits in 2018 were quite better than that of 2017 for some companies but worse for others that had earlier recorded gain in the previous year. Yet there are others who recorded all-round loss in both years.

In 2018, Dangote Flour Mills Plc suffered a loss of N1.16 billion naira, against an earlier profit of N15.13 billion in 2017.

In the same year, Dangote Sugar Refinery Plc, suffered a loss of N21.98 billion, below the N39.78 billion gain recorded in 2017.

Similarly, Honeywell witnessed a decline in profits from N5.60 billion in 2017 to N1.78 billion in 2018.

Nigerian Breweries’ Plc recorded a downward plunge in profit from N33 billion in 2017 to N19.4 billion in 2018.

Nascon Allied Industries Plc recorded a decline in profit from N4.42bn in 2018 from N5.34bn in 2017.

In what may be described as a reversed outcome, some companies were lucky to experience an increase in profit.

Nestle Nigeria Plc witnessed growth in profit from N33.72 billion in 2017 to N43.01 billion in 2018.

Also, Guinness Nigeria Plc recorded a rise in profit of N1.92bn in 2017 to N6.72bn in 2018.

Some companies, however, did not record any profit in either year.

Union Dicon Salt witnessed a loss of N83.77 million in 2017 and another loss of 135.19 million in 2018.

Similarly, International Breweries recorded a total loss of N3.87 billion in both years; 2017 and 2018.

The NSE listed a total of 21 FMCGs in its analysis but only the results of 12 were available at the time of filing this report.

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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Dangote Cement Refutes Claim it Sells Cement High in Nigeria

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Dangote Cement Plc has refuted the widely propagated story that the company sells cement at a significantly higher price in Nigeria compared to other African nations like Zambia and Ghana.

The management of the leading manufacturing company said it sells a bag at N2,450 in Obajana and Gboko, and N2,510 in Ibese, the amounts stated include VAT.

Devakumar Edwin, Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, who spoke with journalists in Lagos, said the company sells for an equivalent of $5.1, including VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.

Devakumar, therefore, described the allegation as false, misleading, and unfounded, and challenged the media to conduct independent investigation into the price of cement in some other African countries, including Cameroun, Ghana, Sierra Leone, Zambia.

To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings.

“We also had to reactivate our 4.5m ton capacity Gboko Plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of Cement within control in the country.”

“Over the past 15 months, our production costs have gone up significantly. About 50% of our costs are linked to USD so the cost of critical components like: gas, gypsum, bags, and spare parts; has increased significantly due to devaluation of the Naira and VAT increase.

“Despite this, DCP has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly.

“We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement. Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius.

“We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far,” Devakumar said.

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Samsung, Vision Care Begin Fresh CSR Activities, Earmark 12,000 Masks for Nigeria

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Samsung Heavy Industries Nigeria Limited (SHIN) and Vision Care, an international relief organization dedicated to the prevention of blindness, have launched fresh Corporate Social Responsibility (CSR) initiative to help Nigeria mitigate the impact of COVID-19 pandemic.

Vision Care is a member of the International Agency for the Prevention of Blindness (IAPB), and participant of ‘VISION 2020’, a global initiative of the IAPB and the World Health Organisation (WHO).

Vision Care has since conducted more than 25 Vision Eye Camps yearly and has grown into an international non-profit organisation serving 38 countries throughout Asia, Africa and Central-South America.

Since 2015, SHIN has worked with Vision Care in the yearly Eye Camp as part of its Corporate Social Responsibility (CSR) to provide free cataract surgeries to Nigerians who cannot afford the payment. SHIN has been sponsoring the eye surgeries of Nigerians on a yearly basis.

In 2019, SHIN sponsored the eye surgeries of at least 115 Nigerian patients and 224 outward patients as part of its CSR in Nigeria.

Since it started the programme, SHIN has sponsored the eye surgeries of 572 Nigerian patients, 1,593 outward patients and has also donated glasses to 99 patients.

Due to outbreak of the COVID-19 Pandemic, the yearly Eye Camp for 2021 had been called off to adhere to Federal Government’s measures in response to the virus.

Consequently, SHIN and Vision Care came up with a fresh CSR initiative this year to donate 496 bags of rice (25kg) and 12,000 reusable face masks to three states in the country to fulfill their commitment of contributing to the society.

The items will be delivered later this month.

The three states that will benefit from the donation are Lagos, Kano and Bayelsa states.

Out of the 496 bags of rice, and 12,000 facemasks, Lagos will receive 96 bags of rice and 200 masks.

SHIN also stated that Kano State will receive 200 bags of rice and 5,000 masks, while Bayelsa State will get 200 bags and 5,000 masks.

“This is an additional CSR activity from SHI in addition to SHIN’s donation of 5,000 COVID-19 test kits from Korea. The washable masks that the head office has purchased from Korea are certified to retain its effectiveness against COVID-19 transmission for up to 50 washes,” SHIN said in a statement.

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Senate Summons NICON, AIICO, Others Over N17.4bn Pension Remittances

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The Senate Public Accounts Committee has summoned the management of the NICON Insurance Plc, AIICO Insurance and other insurance companies over their alleged failure to remit N17.4bn pension fund to the Pension Transitional Arrangement Directorate.

The Senate hinged the summon on the 2016 report of the Auditor-General for the Federation which unraveled the alleged non-remittance of N17.4bn pension fund to PTAD.

Appearing before the panel on Monday, the Executive Secretary of PTAD, Dr Chioma Ejikeme, informed the lawmakers that PTAD took over the assets and liabilities of the defunct pension offices without a formal handing over.

She said, “On taking over, the directorate wrote all underwriters to make returns and remit whatever amount that was in their custody into a CBN dedicated account.

“Some of the underwriters responded to the request while some did not.

“The bank certificate of balances, accounting statements, three years financial statements and policy files requested by the federal auditor were not handed over to PTAD at the time of consolidation.

“It is worthy to note that we discovered that N17.4bn which comprised of cash, securities and properties from the nine insurance underwriters was unremitted as a result of the letter PTAD sent to them.

“These figures represent the claims by the underwriters with regards to their indebtedness.

“In order to ascertain the true position of legacy funds in custody of underwriters, the directorate appointed a consultant in 2018 who carried out forensic audit of nine out the 12 insurance underwriters and produced a final report on the recovery of the legacy funds and assets for PTAD.”

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