May & Baker Nigeria Plc has announced plans to raise a new equity capital by offering new ordinary shares to existing shareholders.
The pharmaceutical company is seeking regulatory approval to raise N3 billion new equity fund. The rights issue of 980 million ordinary shares of 50 kobo each at N2.50 per share. The rights issue has been provisionally pre-allotted on the basis of one new ordinary share for every one ordinary share held as at the close of business on Tuesday, September 4, 2018.
Recall that the shareholders of the company at its 67th Annual General Meeting which was held in Lagos recently gave their nod to the board’s bid to raise capital. At the meeting, a proposed dividend payment of 20 kobo per share was also approved by the management.
Issues around the raising of new capital
It is rather interesting, yet puzzling that May & Baker Plc would even consider proceeding with dividend payment even when it is in apparent need of capital.
Recall that the company had earlier this year sold its food line to Dufil, a move the company said was necessary towards availing it the opportunity to access the much-needed capital towards the actualisation of its refocused business model.
Note that any truly concerned shareholder would understand the need to suspend dividend and plough profit back into sustaining a business when the need for that arises.
It continues to enjoy government patronage
The company recently announced the signing of an agreement with the National Institute for Pharmaceutical Research and Development (NIPRD) for the commercial production of NAPRISAN, an anti-sickle cell vaccine.
In 2016, during the economic contraction, the company lamented the scarcity of forex that affected the importation of its raw materials for the manufacturing of vaccine locally, despite the Federal Government of Nigeria’s pronouncement of a special allocation of forex for manufacturing firms in the country.
May & Baker was founded in 1944 and it is one of Nigeria’s foremost companies and the first in the pharmaceutical industry. Its shares are listed on the Nigerian Stock Exchange and are currently trading at N2.40, with its one year return down by 13.85%.
Trade remedies needed for African free trade implementation – Tola Onayemi
Onayemi said Trade remedies would protect the market from getting flooded by subsidized goods of foreign companies.
Trade remedies to protect Nigerian producers from unfair and injurious trade practices from foreign companies that harm domestic industries are key factors for the implementation of the African Continental Free Trade Area (AfCFTA).
This was disclosed by Tola Onayemi, Head, Trade Remedies Unit National office for Trade Negotiations on Thursday at the AfCFTA Sensitization Seminar organized by the National Action Committee of the implementation of the agreement.
Mr. Onayemi said Trade remedies would protect the market from getting flooded by subsidized goods of foreign companies which would be sold below competitive prices for Nigerian producers. “Trade remedies is not protectionism, it’s protection against unfair trade practices,” he said.
He added that the remedies are policy tools used by governments to take remedial action against unfair trade practices by companies and countries which cause injury to domestic industries, after a rules-based investigation.
Onayemi cited WTO and AfCFTA Trade laws which make provisions for trade remedies in trade agreements. He cited Article 17,18,19 and 20 AfCFTA Protocol on Trade in Goods and Annex 9 of the AfCFTA Protocol on Trade in Goods and the CFTA Guidelines implementation of Trade Remedies in accordance with the relevant WTO agreement. He said the AfCFTA and WTO laws protect against Anti-dumping, which are only applied after a careful analysis has been taken by the host nation.
Before an application of a trade remedy policy tool can be investigated, there must be an existing legislation/regulation and an Investigating authority recognized by international organizations as the body responsible to investigate and recommend appropriate remedies for each unfair practice. If the investigation has been carried out, and there is proof of government subsidies on the product entering the host market, the difference in price is added at the border, before the goods enter the market.
He added that the key features of any Trade Remedy Mechanism include:
- Technical and Investigation based
- Independent of any Policy-making Arm
- Full Notification and Disclosures ( to WTO/AfCFTA, all Importers, Exporters, Home Countries of investigated importer).
On Nigeria’s Trade Remedy implementation policies, Onayemi mentioned a 3-month On-The-Job-Training for Country Trade Remedy experts held from April-June 2018, the Set-up and meetings of EMT committee on Trade Remedies in 2018, also in 2018 Approval of Nigerian Trade Remedies Infrastructure by EMT and Basic technology frameworks for Trade Remedies Investigation in December 2019.
Outstanding tasks include the Signing and Publication of Legal Framework of Nigerian trade remedies and the Deployment and launch of Trade Remedies Electronic Platform with integration by the Nigerian Customs, NBS and Finance.
Dell partners firms to launch Tech Experience Centre in Nigeria
Dell Technologies is to establish a Tech Experience Centre in Nigeria.
Dell Technologies has partnered with some global tech firms to establish a Tech Experience Centre in Nigeria. The centre is a technology project designed to bridge the gap to cutting-edge technologies for millions in the country.
This was disclosed in a statement issued by the company and seen by Nairametrics on Thursday.
In the statement, Nicholas Travers, Director, Central and West Africa, Dell Technologies explained that the project, which will be launched on October 1, would save huge costs and capital flight while also boosting technology adoption in Nigeria.
He said, “We believe the Tech Experience Centre will help reduce the decision making cycle and save huge costs and time of traveling to locations outside our continent to visit and experience these technologies at work. This is a fantastic initiative by TD Africa, perhaps the first of its kind in the region and we are proud to be part of it.”
According to him, the project will go a long way in helping Dell Technologies showcase its suite of cutting-edge technologies.
‘‘The launch of the Experience Centre will support the growth of technology in Nigeria and the West African region. Also, it provides a fantastic platform for Dell Technologies to showcase the very many technologies we offer,” Travers added.
Minister of Communications and Digital Economy, Dr Isa Ali Pantami, is expected to commission the Tech Experience Centre, the first of its kind in Africa.
Travers added that the Centre marked the first time global tech giants would come together to establish their respective experience centres under one roof to create a truly immersive and rich experience of latest technologies in action.
Dangote Cement to extend clinker export to other African countries
Dangote is on course to sell more clinker across West Africa and commence shipment to Central Africa in H2 2020.
The Management of Africa’s largest cement producer, Dangote Cement Plc (DCP), disclosed during a virtual event yesterday, that the cement producer is set to commence clinker export to other African countries within the next few weeks.
The Acting Group CFO, Guillaume Moyen, made this known in his presentation at the joint virtual event with NSE, tagged “Facts Behind the Figures and Sustainability report’’ on Wednesday, 24th September, 2020.
Backstory: In its half-year report, the Management of Dangote disclosed that on 12 June 2020, the maiden shipment of 27.8Kt of clinker from Nigeria to Senegal left the Apapa Export Terminal.
The Management reiterated that the company is on course to sell more clinker across West Africa, and commence shipment to Central Africa in H2 2020. As it is in line with the Group’s vision of making West and Central Africa, cement and clinker independent, with Nigeria the main export hub.
The absence of limestone in much of West Africa, especially those in the coastal states, forces those countries to import bulk cement and clinker from Asia and Europe, and this is quite expensive.
However, Dangote Cement plans an ‘export–to–import’ strategy, positioning Nigeria as the main export hub of the continent, in a bid to serve West and Central Africa countries from Nigerian factories, making the region cement and clinker independent.
This is consistent with the Group’s vision of cementing Africa’s economic independence, as this would lead to lower clinker cost for pan-African operations, due to the proximity of Nigeria to these countries, as clinker landing cost will be cheaper.
The Management emphasized that this is possible, as Nigeria can serve a potential market of 15 countries, with over 350 million people, given the county’s relative abundance of quality limestone, especially in key Southern regions.
It is important to note that DCP’s clinker volume, according to figures contained in its H1 2020 results, has increased to 60Kt from 12kt in H1 2019, which translates to 400% increase.
The benefits of DCP’s export strategy
It is noteworthy that the innovative strategy of Dangote Cement Plc is expected to;
- Cement Africa’s economic independence, and contribute to the improvement of continental, regional, and intra-regional trade, as the company seeks to make regional and continental free trade agreement a reality.
- Ensure that the increase in production due to exports, leads to increase in capacity utilization in the Nigerian operation, and in turn, reduces fixed cost per tonnes.
- Increase foreign revenue exchange for the Nigerian operation, and offset foreign exchange risks.
- Reduce clinker landing cost, by leveraging on the proximity of Nigeria to other African countries.
Some of the benefits of our export strategy are Higher capacity utilization of our facilities; Ecowas benefits; Foreign exchange; and Lower clinker cost for Pan-Africa operations – @guillaumemoyen
#NSEhostsDangote https://t.co/TGd2N6JGZw pic.twitter.com/TvPGHunsb0
— The Nigerian Stock Exchange (@nsenigeria) September 23, 2020