Food is man’s most important need, a fact that has long been established as many nations of the world have taken numerous measures towards ensuring food security. Unfortunately, Africa continues to lag behind in this quest to ensure constant availability of food. There is, however, a company in Nigeria that is playing a major role towards remedying this situation. That company is Notore Chemical Industries Plc.
Avid readers of Nairametrics already know that we have a tradition of writing special profiles of Nigerian companies once every week. But for the sake of newcomers, this column focuses specifically on little-known corporations that are listed on the Nigerian Stock Exchange, NSE. The essence is to provide investors with precise, yet holistic information about companies that they might want to invest in.
Today, focus is on Notore Chemical Industries Plc, which just got listed on the Nigerian bourse. Get to know all there is to know about this company, starting from its history in the Nigerian market, its business model, challenges, and particularly how it facilitates Nigeria’s quest for food security.
About Notore Chemical Industries Plc: A corporate overview
Notore is a Nigerian company which is mainly involved in the manufacturing and merchandising of fertilisers – first to the Nigerian market, then elsewhere. It also engages in the marketing of seedlings to farmers, and the production and distribution of electric power by the side, amongst other business activities.
As a corporate entity, the company has had a long history in Nigeria during which time, it has undergone both ownership and identity changes. As a matter of fact, Notore’s history can be traced back to 1981 when it was initially incorporated as the National Fertiliser Company of Nigeria, NAFCON. Note that this was a joint venture partnership between Nigeria’s Federal Government (which controlled 70% shareholding), and Kellog Brown and Root, which controlled 30% shareholdings.
For 18 years, NAFCON operated successfully until 1999 when it was shut down due to technical failure. It then remained shut for six years until 2005 when the Government decided to privatise it. This was when Notore Chemical Industries Plc was birthed. The new company came into the picture with an obvious intent to turn things around. In 2007, the new owners raised the sum of $222 million from banks, money that was intended to drive growth. Since then, the company’s Board has signed various types of deals and MoUs with both foreign companies and governments – all of which are efforts geared at transforming it for continued growth.
Currently, the company has a production capacity of 1,500 metric tonnes per day of Urea, 1,000 metric tonnes per day of Ammonia, and 2,000 metric tonnes per day of NPK fertilizer.
Listing on the Nigerian Stock Exchange
As we exclusively reported, Notore Chemical Industries Plc recently became the first company to list on the NSE this year. Back in August, it listed a sum of N1.61 billion ordinary shares of N0.50 each at N62.50 per share, which roughly translates to a market capitalisation of about N100.75 billion.
The company’s business model and focus audience
As noted in the onset of this article, food is inevitable. Unfortunately, several challenges are often encountered in the food production process. One of such challenges is the inability of some lands to support optimum crop yield. This problem is perhaps peculiar to most parts of Nigeria where the soil often lacks the necessary nutrients to support plant growth.
Years of research and technological advancements have availed mankind the possibility of supporting crop yield through the use of fertilisers. This is what Notore is taking advantage of to solve an important problem, whilst making profits in the process.
That said, Notore basically targets farmers in Nigeria and elsewhere in Africa and the world. The company is strategically located at Onne in Rivers State Nigeria, where it does not only have easy access to natural gas for fertiliser production but also access to the Atlantic Sea for exportation.
In Nigeria, Notore Chemical Industries Plc is represented in 700 Local Government Areas, where its fertilisers are used on farmlands. There are 70 major distributors who sell Notore’s fertilisers to 3000 retailers. 56 commercial farms and off-takers account for 20% of the company’s total annual sales.
The company also targets international markets, having exported goods valued at $713,674.00 in 2017 alone. As we reported, it was among the top ten largest non-oil exporters in Nigeria, ranking in the same category as the likes of Dangote Cement. Examples of markets where its products were exported to include Morocco, Israel and the Americas.
Segmentation of Notore Chemical Industries Plc
The company is segmented into the following subsidiaries:
* Notore Supply and Trading Mauritius Limited
* Notore Power Limited
* Notore Foods Limited
* Notore Seeds Limited and
* Notore Industrial City Limited
A look at competition
Notore Chemical Industries Plc currently controls an estimated 60% market share in Nigeria. This is not surprising, seeing as it prides itself as the leading fertiliser manufacturer in Sub-Saharan Africa. As such, it currently maintains the lead in the quest to “champion the African Green Revolution” as it claims on its website.
Interestingly, the company’s seemingly indomitable leadership position may soon come to an end. This is because Africa’s richest man, Aliko Dangote, is building alongside its refinery, what is said to be the biggest fertiliser plant in the whole of Africa. When this is ready, Notore will have real competition.
The company’s Board of Directors
Early last month, just a few weeks after listing on the NSE, Notore Chemical Industries Plc issued a statement to the Exchange announcing some changes to its Board of Directors. Mr Ohis Ohiwerei was appointed an Executive Director following the retirement of Mr Femi Agbaje.
He joined other members of Board, including the Group Managing Director, Mr Onajite Paul Okoloko, and the Chairman, Dr Yakubu Gowon.
A look at the company’s recent financial performance
Notore Chemical Industries Plc has been on a profitable track in recent times. Its most recent financial report for the quarter ended June 31st, 2018 shows that it earned N20.5 billion against an operating cost of N12.4 billion. During this same period last year, the company had recorded a revenue of 25.8 billion against an operating cost of N18.6 billion.
Meanwhile, profit for the period ended June 31st stood at N3.9 billion. This is better than the sum of N3.7 billion, which is the profit after tax for the same quarter in 2017.
It is important to note that the company’s revenue generally improved within the past five years, with a total revenue of N35.8 billion recorded in full-year 2017, against N25.2 billion in full-year 2016. Profits also showed positive improvements, rising to N8.6 billion in 2017 whilst marking a sharp departure from the company’s losing streak between 2016 and 2014.
More opportunities for growth abound
Notore Chemical Industries Plc recognises that there is room for growth. This is, considering the fact that both the production volume of 1.5 million metric tonnes per annum and the consumption rate of 8-10 kilograms per hectare are far below what obtains in other countries with similar fertiliser needs as Nigeria.
For this reason, the company is dedicated to not only improving its production capacity but also ensuring greater fertiliser consumption in Nigeria. It is expected that their listing on the Nigerian Stock Exchange would improve their business activities and in turn, ensure the actualisation of greater food security on the African continent and elsewhere in the world.
ECOWAS COVID-19: Nigeria drops to 7th position in recovery rate
According to data from ECOWAS Centre for Surveillance and Disease Control, Nigeria has dropped to 7th position in recovery rate.
The ECOWAS COVID-19 daily update report, as of November 22nd, 2020, shows that Nigeria is ranked 7th on recovery rate (93.5%), 10th on death rate (CFR – case fatality ratio) at 1.76%, and 9th on active cases (4.7%) amongst the 15 member countries of the ECOWAS (Economic Community of West African States).
This data can be seen on the Twitter handle of the ECOWAS Centre for Surveillance and Disease Control.
— ECOWAS Centre for Surveillance and Disease Control (@Ecowas_cdc) November 23, 2020
A week ago, as of 15th November 2020, Nigeria occupied the 6th position in recovery rate (93.7%), 9th position in CFR (1.79%) and 11th position in active cases (4.5%).
According to the report, there are 209,614 confirmed cases, 2,842 deaths, 189,917 recoveries, and 8,849 active cases in ECOWAS countries. This data represents in Africa, 9.8% of the confirmed cases, 5.7% deaths, 10.9% recovery rate and 3.3% active cases.
As regards the death rate (CFR), Liberia tops the list with 5.29%, followed by Niger 5.12% and Mali 3.41% while Guinea is the least with 0.58%.
On recovery rate, Cote D”Ivoire tops the list with 98.3%, followed by Senegal 97.5% and Ghana 97.1%, with the least coming from Mali with 71.1%.
Mali has more active COVID 19 cases with 25.5%, followed by Sierra Leone 20.9% and Togo 20.9% and with Senegal contributing the least with 0.4%.
What you should know
- As at November 22 2020, worldwide, there are 58,649,324 confirmed cases, 1,388,068 deaths and CFR of 2.3%
- In Africa, there are 2,057,029 confirmed cases, 49,412 deaths and CFR of 2.4%
- In West Africa, there are 201,614 confirmed cases, 2,842 deaths and CFR of 1.41%, with a recovery rate of 94.2%.
Naira devaluation, FX scarcity caused increase in cost of goods – Nigerian Breweries
Nigerian Breweries has revealed that Naira devaluation, FX scarcity caused increase in the cost of its goods in 2020.
The Finance Director of Nigerian Breweries Plc, Rob Kleinjan, has revealed that the increase in the brewer’s costs of goods was due to the devaluation in naira and FX scarcity, which led to the increase in the cost of inputs such as sorghum and sugar, as they are not fully produced locally.
This disclosure was made during the Nigerian Breweries’ Fact Behind Figures results presentation today.
However, Kleinjan explained that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity, which exerts pressure on imported input materials.
He said the increase in Nigerian Breweries’ costs of goods sold, as reported in its unaudited financial results, could also be linked to the volume of goods sold, as the company’s sales volume in Q3 increased by almost the same percentage as the cost of goods sold.
However, Mr. Kleinijan reiterated that to mitigate further losses, it was important for the company to focus on the supply chain and seek ways to mitigate price increases.
What they are saying
The Managing Director of Nigerian Breweries, Mr. Jordi Borrut, while speaking at the virtual event said:
“In 2020, the results of Nigerian Breweries were adversely impacted by COVID, VAT increase, FX devaluation and scarcity of foreign exchange. The year started with a promising 1st quarter, which was heavily impacted in Q2. The Nigerian market, however, rebounded in Q3.”
Mr. Rob Kleinjan, while explaining the factors behind the increase in Nigerian Breweries’ cost of goods sold in the first nine months of 2020, said:
“It is also clear that the increase in cost is due to the devaluation and the FX scarcity which has put pressure on our input cost. If you look into the main elements we use, which are sorghum and sugar – they are not fully produced locally, so when the currency is devalued, the prices of these inputs will soar.
“That’s why it’s important that we are focused on the supply chain, and seek for ways we can mitigate any of the price increases, because the increase in cost comes from the input prices, which come from FX scarcity.”
FG petitions CNN over investigative report on Lekki shooting, threatens action
The Federal Government has petitioned CNN over its alleged bias report on the Lekki Tollgate shooting.
The Federal Government has written a petition to the US-based Cable News Network (CNN), demanding an immediate and exhaustive investigation into its report on the Lekki Tollgate shooting, to determine its authenticity and conformity to basic standards of journalism.
The government berated CNN for its investigative report on the #EndSARS protest in Lekki area of Lagos, pointing out that the media outfit breached the most basic of the core principles of journalism – balance and fairness.
In the petition written by the Minister for Information and Culture, Lai Mohammed, to Jonathan Hawkins, VP (Communications) in CNN Centre Atlanta, Georgia; the government said that if the international media organization does not carry out its demand, it will take any action within its laws to prevent CNN from making the #EndSARS crisis worse.
According to a report from Punch, the government’s letter dated November 23, 2020, is titled “Re: How a bloody night of bullets quashed a young protest movement”.
The letter reads: “Our attention has been drawn to an ‘investigation’ by CNN, entitled ‘How a Bloody Night of Bullets Quashed a Young Protest Movement’ and aired on 18 Nov. 2020, in which the international news organization said it uncovered that Nigerian security forces opened fire on unarmed protesters at the Lekki Toll Gate in Lagos, Nigeria, during the #EndSARS protest.”
“We write to put on record that the report did not just fall short of journalistic standards, it reinforces the disinformation that is going around on the issue. It is blatantly irresponsible and it is a poor piece of journalistic work by a reputable international news organization.
“In the first instance, the report did not live up to the most basic of the core principles of journalism – balance and fairness. According to the website www.ethics.journalists.org, balance and fairness are classic buzzwords of journalism ethics: In objective journalism, stories must be balanced in the sense of attempting to present all sides of a story. Fairness means that a journalist should strive for accuracy and truth in reporting, and not slant a story that makes a reader draw the reporter’s desired conclusion.”
What you should know
It can be recalled that CNN in its investigative report broadcasted on November 18, disclosed that the Nigerian army allegedly fired live ammunition directly at unarmed protesters, who peacefully assembled at the Lekki Tollgate during the #EndSARS protests. While confirming some deaths, CNN said it spoke with over 100 protesters and family members, but didn’t speak to any government official.
In response to the Federal Government’s criticism of the report, which it described as a blatantly irresponsible and a poor piece of journalistic work, CNN insisted that it was standing by its report.