This Corporate News Compilation for the week ended April 7th, 2018 is brought to you by Bluechip Technology Ltd Nigeria.
1. Jumia Food launched a new app last week that they claim will “better user experience”. To be honest, I have never used the app before, so I don’t really know how the previous one functioned.
One thing that, however, caught my interest was the traffic data they shared. According to Jumia Food, orders via desktop laptops still take the lead with 40%, while the iOS App takes 25% across all African countries.
This suggests, most of their customers are 9-5 well-paid employees who prefer to order while at work. I wonder if Jumia Food can share what the average sale per order is. My wild guess will be in the region of N5k.
2. Transsion Holdings, the owners of Tecno Mobile launched a slew of new phones. One of the phones they introduced is the Tecno Camon X Pro which they claim has the “Face ID could be used to unlock the phone when lighting up the screen by grasping the face formation.”
It’s amazing how Tecno has been dominant in Africa and how it is able to churn out phones that can compete favorably with the likes of iPhone and Samsung. Got to also admire their persistence.
3. Still on Tecno, did you know that most of the phones they sell in Nigeria are made in Ethiopia? I can’t seem to wrap that around my head.
Nigeria is their largest market, yet they make their phones in the East African Country. This says a lot about this country and the failure of ease of doing business.
To think the Minister of Communications Adebayo Shittu was basically begging Tecno to set up a factory in Nigeria telling them that to “ensure within the next 2 years, you will set up a production plant. Just let me know your shopping list and I will persuade government to take action on it.” We are not yet serious.
4. OLX unveiled a new “overhauled app” which it will use to replace its website and mobile site.
The app is a “Progressive Web App (PWA) and they claim is their biggest upgrade to date. It is expected to include some security features that they claim will make transactions safer.
According to OLX, Users will now have a profile, be able to see who they are talking to, and through Facebook verification, will be able to see if they have any mutual friends in common. This new layer of security will help to further prevent potential scammers and fraud. OLX recently closed its operations in Nigeria and Kenya but still offers its service in the country.
5. The Fintech market is getting ever so competitive in Nigeria and we only just started. Last week, kolopay (formerly MyKolo) was featured on Techpoint.ng.
In case you didn’t know, Kolopay is a Fintech product that offers their app for users to save and earn an interest. They compete with the likes of Cowrywise and http://Piggybank.ng . So, let’s get to their proposition.
According to the article, they allow users save on their platform in exchange for 6% interest rate. Users sign in with their mobile numbers, set targets and then, of course, enter their debit card details. And then voila, you can start saving and earning. At 6% their rates are better than bank rates but only by 2%.
Now if you consider that banks are somewhat safer in that NDIC covers deposits of up to N500k and most savers fall within this range. Also, at 6% you are essentially losing 8% of your money to inflation (over 14%). Negative real return is actually -8%. Hard to see any potential benefits to any saver here except the discipline it provides and the allure of comfort that 21st-century Fintech services bring to consumers.
6. Still on KoloPay. They claim the difference between their product and the competition is that users can also have access to e-commerce on their app.
So assuming you see a Phone you like in their store. Simple save towards it and buy it on the same platform. Quite compelling and a useful feature to have even though one can argue that it encourages savings only for you to spend it.
7. Nigerian website hosting company, Domainking.ng, announced new packages targeted at Small Businesses.
The company says with just N3.6k you can have a website with their starter pack in 30 minutes. This, they say will get you a .com.ng or .ng package. What they, however, did not say is that the N3.6k is per month.
On their website, they advertise that a WordPress blog with 75k pageviews per month will get N10GB space at N3k per month. Their offer looks good but to be candid the challenge with web hosting has always been customer service after purchase.
If the likes of Godaddy are still terrible at it (despite their size and money) I just wonder how their Nigerian counterparts can deliver.
8. Asoko Insights last week announced the completion of its $3.6 million Series-A fundraising round.
The company Provides data on Private Companies in Nigeria and Africa and sells to investors and researchers.
Asoko Insights says it plans to use the new funding to deepen its product offering to compliance professionals, expand its African footprint and build on its technology to support scaling data collection, analysis, and delivery. The company started just 4 years ago.
9. Ecobank Group reported last week that its rejigged mobile app has “attracted 3 million new customers in just 6 months” taking its total number of users to 4 million.
10. Nigerian based Digital Advertising company, @TerragonGroup announced last week that it had raised about $5 million from TLcom Capital.
It plans to use the cash to help scale its data and marketing technology platform. The company is led by Elo Umeh. They also introduced a digital advertising product in conjunction with MTN.
According to them, advertisers can now send ads in the form of text messages to their potential customers. The product works a bit like Google AdSense, as ad agencies can simply pay money into their account and place ads via a dashboard. Users can also monitor the performance of their ads via various analytics and also control their ad spend.
The company’s major challenge might be the deluge of complaints they might get from subscribers who detest unsolicited messages. Though they claim customers can simply activate the DND feature on their phones if they do not want messages.
11. Uber still believes it is relevant in Nigeria and demonstrated this resolve by announcing Banky W as their brand ambassador for Nigeria for 2018.
Apart from his popularity as a musician and actor, Banky is also an experienced Brand Ambassador, so it’s easy to see why he was picked. Whilst I don’t have anything against this move, what Uber Nigeria needs the most are more drivers and better customer service.
Taxify by my estimates leads the ride-sharing business in Nigeria and the likes of OgaTaxi are dark horses.
12. So, last week the Nigerian Shippers Council waded into a row between GAC Shipping Nigeria (a shipping company) and JOF Nigeria Limited (a clearing agent).
Apparently, GAC seized 50 containers of raw materials for production that belongs to Nestle over unpaid demurrages worth N37m and failure of GAC to return empty containers.
NSC got involved and sealed the premises of GAC for about 3 hours and claimed: “it was wrong for a shipping company to seize as much as 50 containers of raw materials belonging to a manufacturing company, adding that this was not good for the economy.”
13. The Chairman of @BUAgroup , Abdulsamad Rabiu is taking the competition to Alhaji Dangote and this time it will be on the Nigerian Stock Exchange.
He announced plans to list the cement division of the group on the Nigerian Stock Exchange (NSE).
According to him, “We are definitely going to list the cement business because I think we should also give others the opportunity to participate in the business. If you have such a big business and it is doing very well, you should give others the opportunity to be part of it. That way, you can unlock some of the capital you have invested in the business and do other things,”
14. Presco Plc announced last week that it is has set aside about 15,000 hectares in Edo State which it says it will use to cultivate its plantation.
Presco claimed this move was in line with its “Green Energy Investment” initiative. However, we believe this is in response to stiff competition in this sector. We observed that Okomu Oil and PZ Wilmar have recently ramped up investments in Oil Palm Plantations.
For example, late last year, Okomu Oil Palm Plc announced it had finalized plans to invest the sum of $45m towards the construction of the largest oil palm mill in Africa.
The company also in January this year, began the process of commissioning its Extension 2 Estate at Ovia North East LGA in Edo State. PZ Wilmar is equally undergoing expansions and better positioning its self to lead the market. Despite some of these developments, Oil Palm production still relies on Nigeria for a huge share of their market.
Can’t wait to see them pick up massively on the export market.This may be a good time to own shares in these companies Disclaimer: I own shares in both Presco & Okomu
15. Are you into the business of selling starch and cassava? Then this might interest you. Unilever announced last week that it was looking for “Intermediary Companies” in the agro sector who are willing to supply them.
This is under their ‘Partner to win” initiative which they claim is for local vendors to help them achieve 100% local sourcing of material inputs. Unilever claims it already does about 90% on packaging materials.
16. Farmcrowdy announced the launch of some 7,500 new acres for maize and rice farms in Kaduna and Kwara States.
This marks a 175% increase in the number of acres held by the startup, which n 2017, cultivated about 4,000 acres in eight states of the federation.
According to a press statement issued to Nairametrics, the agro-tech company plans to dedicate some five thousand [5,000] acres of land for maize cultivation. The 5,000 acres are located in Kaduna State and will be cultivated by Farmcrowdy’s new 2,000 farmers there.
17. The Ondo State Government announced it received a proposal to partner with Dangote Group to cultivate rice production in the state.
To this end, they acquired 3,000 hectares of land and claim they will produce 15,000 tonnes of rice annually. As a carrot, they dangled a promise to employ over 6000 youths in the state out of which 30% will be women.
18. The Kaduna State Government last week inaugurated the Blue Camel Renewable Solar Power Assembly Plant and Renewable Energy Training Academy in Kaduna.
According to the Managing Director of Blue Camel, Mr. Yusuf Suleiman, “the project has the capacity to assemble over 10,000 units of different solar products in a year and train over 3,000 youths in different renewable energy entrepreneurship skills.”
He also revealed that the company had invested over one million dollars and would be investing another five million dollars within 24 months to ensure the delivery of solar-generated power to factories.
A report claims the Kaduna State Govt granted the company land “within 24 hours of request.” Blue Camel designs and Integrates renewable energy solutions which cut across all level of energy demands ranging from small household solar and hybrid systems to mini solar grid systems for rural electrification and industrial power backup systems.
From what we know so far about the company, they seem to do a lot of B2B deals and have the likes of Sterling Bank, Silver Bird, Unity Bank, EFCC, OXFAM as their customers. The company claims it is going from only importing Solar products into the country to actual assemblage and production.
Most Solar Industry players currently import their Panels and Batteries from Europe and China. This Solar Industry is one that is waiting to explode in Nigeria. Once they are able to deliver products at a price point that’s within the reach of Nigerian, it will likely be the next “oil and gas”.
19. The Lagos State Government announced on Friday that it has reached an agreement with PSP operators and Visionscape.
PSP and Visionscape have been at loggerheads since the LASG changed the model for waste disposal in the state. Lagos State disclosed this via a flurry of tweets and revealed that the PSP Operators will return to their role as residential waste collectors while Visionscape will oversee waste management infrastructure in the state.
They also changed the name of the PSP to Waste Collection Operators, so I am assuming they will be called WCO’s. The WCO also confirmed this development disclosing that they have “decided to support the government in the initiative to get rid of the waste.”
20. UPDC disclosed during the week that they will be spinning off their Hotel Subsidiary, UPDC Hotels Ltd.
The Hotel Co is the vehicle that owns assets such as Golden Tulip and the Festival Mall. UACN has struggled for years now with its real estate subsidiary and had to deal with lower margins and mounting losses.
The hotel reported a revenue of N1.62 billion in 2017, a 20% rise from the N1.2 billion reported a year earlier. However, losses continued in 2017, as it reported a loss of N293.6 million compared to a loss of N552.2 million in 2016.
In 2015, the hotel reported losses of N773 million compared to N160 million in 2014. UPDC Hotels has reported losses since its inception in 2010.
21. Still, on UACN, it’s pretty much confirmed that their sojourn in the real estate hasn’t quite worked out as planned.
The company’s food division has basically sustained its performance over the years and it appears they are consolidating on that premise. For example, this year the F&B Section of the business posted N2.5b in profits while the Paints division posted N2.3b.
However, the Real Estate Business which includes UPDC, posted a loss of N3 billion. Last February, they liquidated their investment in Warm Spring Waters Limited. They also recently raised N15b in December via a rights issue and also recently added new strategic investors to their business.
22. So Tantalizers Plc released its 2017 earnings on Wednesday. The company reported a System Revenue of N3.7 billion up from 2.7% from the N3.6 billion in systems revenue reported a year earlier.
System revenues include revenues from its Franchisee companies. The company was also boosted as it reported its first profits in over 5 years, reporting a profit after tax of N443 million.
The latest profits helped the company avoid a technical insolvency as it was just N300 million away from negative equity. The company would have been technically insolvent if it had not posted profits.
To do this it had to sell off some of its lands and buildings raising over N1 billion in cash. It also got a write back on some of its loans and we suspect it might have been IFC taking the hit.
Tantalizers has demonstrated that it has 9 lives and I respect them for that. However. I don’t see them getting out of this hole unscathed. Not with the likes of Mega Chicken, The Place, and Chicken Republic doubling down on their stronghold.
It’s amazing how things change quite fast and how sloppiness can quicken disruption. Before now, the likes of Mr. Biggs, Sweet Sensation, and Tantalizers dominated this space. Now they are all struggling.
The battle is not over yet though as the likes of Dominos and other upscale diners have their eyes set on changing the consumption pattern of middle-class Nigerians.