Folorunso Muyiwa is the Chief Executive Officer of Divergent Enterprise, the parent company of Porkmoney. In this interview, he outlined the opportunities and importance of investing in the non-oil sectors for economic growth. Excerpts:
What did you set out to achieve when you established pig business?
Porkmoney was birthed in 2018 with an objective to create wealth for our financial partners through pig farming.
Federal Government maintains its determination to diversify the economy. Do you think that is achievable?
It is definitely achievable. The diversification of the economy is probably the only option left for development and growth. This is because the economy continues to be over-reliant on oil, the numbers speak for themselves. Oil accounts for 80% of government’s revenue and 90% of foreign exchange earnings. No country can totally depend on only one economic sector, especially one that is blessed with a lot of natural resources like Nigeria.
I believe that there are great opportunities for non-oil sectors to grow and this growth has been visible since 2001. Of course, the changes cannot be that quick and the transformation will not happen overnight. However, the federal government can develop different sectors by taking the important steps necessary for growth to take place. We can no longer be a mono-economic country.
What would you consider as the most limiting factor to entrepreneurship, especially for youths?
Lack of capital has to be one of them. Aside from the fact that the Nigerian environment is not too conducive and encouraging for budding entrepreneurs, raising capital and access to funds, has to be one of the biggest challenges for youth in business. Another is the unfavourable tax policies, poor management, corruption, lack of training and experience, poor infrastructure, and a lack of specialised skills to scale one’s enterprise, none of which is insurmountable for the determined person.
How would you rate Nigeria’s scale of Small Medium Enterprises, compared to Malaysia and other countries?
The SME sector is the backbone of major developed economies, as well as important contributors to employment, economic and export growth. Malaysia is doing remarkably well when it comes to the business scene. About 98.5% of Business establishments In Malaysia are SME’s which contributes to 36.5% of their GDP and 65% of the country’s employment. This is impressive. But despite the significant contribution of SMEs to the Nigerian economy(48%), challenges still persist that hinder the growth and development of the sector. Some of the overriding issues are access to funding, lack of skilled manpower, the multiplicity of taxes, high cost of doing business, among others. This proves that there is still much to be done.
What challenges did you encounter?
Every business comes with a few challenges. One of the challenges we constantly face is the need to micro-manage casual workers. From farm handlers, managers, production managers to other workers. Many of them compromise on set standards by cutting corners, especially in meat processing and livestock welfare. Another challenge is the religious sentiments in this part of the world towards pigs and pork products. However, this was a more pronounced problem at inception and it is gradually dissipating with time.
Knowing the religious sensibilities of the country, did aversion to pork cross your mind?
Not at all. In as much as there’s a religious proscription to the consumption of pork, we cannot ignore its usefulness and benefits to our health and nourishment and just how lucrative the pig farming industry is. I mean, Nigeria is a major consumer of pork and 80% of it is imported. This means that a lot of people enjoy this animal protein, all we are doing is localising its production.
Could that explain why you ventured into pig farming?
The idea for Porkmoney grew out of the desire to tap into an over neglected sector of livestock farming (Pigs) that has the potential to create value and change the agricultural ecosystem for good. Long ago before Porkmoney was launched in 2018, I had visited a pig farm in Ogun State. One of the biggest in the country and realised how fast the pigs grew and the viability of the pig farming system in general. I knew this was something I needed to be a part of and I’m glad for the decision that I made. We are currently the leading Pig farming enterprise in West Africa and our results speak for itself.
Did you derive the idea of establishing PorkMoney from that enterprise?
My visit to that farm was definitely a turning point for me. Before then, I was oblivious of the untapped goldmine that is pig farming.
Vaccines and disease surveillance have always been the bane of animal husbandry, how do you react to that observation?
Livestock is very prone to diseases, hence the need to constantly take precautionary measures such as the administration of vaccines and disease surveillance activities across the farm to prevent disease outbreaks. Very recently China witnessed it’s the biggest animal disease that claimed the lives of the livestock and cost the country to lose billions of dollars because of its flawed surveillance.
So, it’s important for other pork producing countries to take adequate disease surveillance and testing programs in order for these diseases could be detected early enough and prevent a fast spread. And so far our farm partners under our management have taken adequate measures that have seen us not witness any outbreak since our launch in 2018, we expect that with our measures this would continue to be the case.
Is it possible to alter negative public perceptions about pig farming?
Yes, one of our key responsibilities is to enlighten and educate the general public about the great side to pig farming and inform them of the many benefits of pork consumption. Somehow our environment and the kind of information we were exposed to as a people, have influenced our idea of certain things. There are a lot of things we might need to unlearn as time goes on. So by using all our platforms, from our social media, our website and even our adverts, we have ensured that we always show the good side to pig farming because they’re a lot.
Did you think about the possible health challenges in pork breeding?
Of course, we do. However, we ensure that we take the appropriate steps to mitigate any possibility. We also take proper hygienic measures like vaccination, quarantine, and biosecurity which keeps our weaners very healthy.
Are you saying there are no associated diseases?
Livestock farming comes with a risk of an outburst of diseases but if managed properly, can be prevented. And the great thing about pigs is just how resilient they are as compared to any other livestock for farming. They are simply incredibly disease resilient.
As an entrepreneur, how did you overcome initial apprehensions, especially funding, and what areas have you exerted your ideas so far?
When i was starting out in business, I had no capital, training or resources to start my journey. The brilliant ideas were there, all that was needed to execute them was finance. This was lacking but I had to start small and grow multiple businesses over the years till I was able to afford the capital needed to start my current pursuit.
BUA Cement Plc posts impressive unaudited H1, 2020 financial results
Revenue increase by 12.7% to N101.3 billion; Profit After Tax (PAT) rises by 13.74% to N34.82 billion.
One of Africa’s largest cement producers, BUA Cement, has announced an impressive 2020 half-year results declaring revenues of N101.3billion and a Profit After Tax of N34.82billion representing an increase of 12.7% and 13.74% respectively from the corresponding period in 2019. This was contained in a filing to the Nigerian Stock Exchange.
Speaking on the results, Yusuf Binji, Managing Director of BUA Cement said that the continued impressive performance in 2020 despite the challenging operating environment occasioned by the COVID-19 pandemic, was a pointer to the value and strength of the BUA Cement brand and product offerings as well as a nod to the excellent implementation of the company’s Business Continuity Plan which ensured that BUA Cement was able to withstand the impact of the pandemic in the period under review.
“Our resilient performance continues to showcase the value and strength in our product offering alongside our strategic business model. Our revenues increased by 12.7% to N101.3 billion from the corresponding period in 2019 whilst Operating profits increased by 7.0%, from N38.1 billion in H1’2019 to N40.8 billion in H1’2020. Equally, EBITDA margin improved in this quarter to 48.1% – an improvement from 45.6% in Q1, 2020.”
“In a bid to further drive cost efficiencies and sustainability, we entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) at the Kalambaina, Sokoto State and the management of our mining operations. Given these deliberate and strategic choices amongst other cost management efforts, we continue to combine development and innovation into our offerings and activities,” Binji added.
On the impact of the pandemic on the business, Binji noted that, “despite the prevailing economic conditions, we are quite optimistic about the future because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy.”
It should be noted that BUA Cement has also been actively involved in alleviating the impact of the virus on the most vulnerable in society while also supporting the government’s efforts by providing foodstuff, PPEs and medical equipment to host communities amongst others.
- Revenue increases by 12.7% from N9 billion in H1’2019 to N101.3 billion, as at H1’2020
- EBITDA increases by 5.8% from N8 billion in H1’2019 to N47.4 billion, as at H1’2020 (Quarter-on Quarter (q/q), EBITDA margin increases from 45.6% in Q1’2020 to 48.1%, as at Q2’2020)
- Operating profit up 7.0%, from N1 billion in H1’2019 to N40.8 billion in H1’2020
- Profit before Tax (PBT) increases by 9.8% from N7 billion, as at H1’2019 to N39.2 billion, as at H1’2020.
- Profit after Tax (PAT) up by 13.7%, from N61 billion in H1’2019 to N34.8 billion, as at H1’2020,
- Earnings Per Share (EPS) increases by 14.4% from N90 kobo in H1’2019 to N1.03 Kobo, as at H1’2020
- Cement volume dispatched up 7.9% from 2,282 kt in H1’2019 to 2,463 kt, as at H1’2020; underpinned by growing market acceptance, our COVID business continuity plan and particularly, a business environment not inundated by the Coronavirus pandemic
- To boost energy efficiency and reduce energy costs, we entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) for the Kalambaina operations and management of our mining operations
- Continued push to ‘new markets’ aided by a focused distribution strategy
Conference call details
BUA Cement Plc will hold a conference call for analysts and investors on 06 August 2020 at 14:00hrs Lagos (09:00hrs New York, 14:00hrs London, 15:00hrs Johannesburg). To pre-register, please click on this Registration link to receive the dial-in details, which includes the passcode.
A copy of the presentation will be made available before the call and can also be downloaded from the Company’s website at http://www.buacement.com/presentations/
About BUA Cement Plc
BUA Cement Plc is Nigeria’s second-largest cement company and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa and with plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State, Nigeria. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State.
BUA Cement Plc is the third most capitalised company on the floor of the Nigerian Stock Exchange.
BUA Cement is committed to quality – a differentiating attribute, driven by its people, innovation and technology; and positioned to solving Nigeria and Africa’s challenges while driving economic growth and development.
More information can be found at www.buacement.com
Zenith Bank rewards customers with massive giveaways in the “Zenith Beta Life” weekly promo
The Promo is open to existing and new Zenith Bank customers.
Zenith Bank Plc, Nigeria’s leading financial institution, has commenced its “Zenith Beta Life” Promo to reward customers of the Bank with gifts every week starting from 31st July 2020 to 30th July 2021.
During this period, fifty (50) customers will be selected via raffle draw each week and rewarded with gifts worth NGN30,000.
The Promo is open to existing and new Zenith Bank customers with the following raffle qualifying criteria:
- maintain a minimum deposit of NGN5,000 for the period;
- request and collect a Zenith Bank Card; and
- download and register on the Zenith Mobile App or register for *966# EazyBanking.
Zenith Bank Plc is recognised as one of the most customer-focused financial institutions in the country and was voted the most customer-focused bank in Nigeria for the retail and SME segments in the 2018 KPMG Annual Banking Industry Customer Satisfaction Survey (BICSS).
A clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions, Zenith Bank has clearly distinguished itself in the Nigerian financial services industry through superior service quality, unique customer experience and sound financial indices.
In recognition of its track record of excellent performance, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto and Co. The Bank was also recognised as Bank of the Year and Best in Retail Banking at the 2019 BusinessDay Banks and Other Financial Institutions (BOFI) Awards.
More recently, the Bank emerged as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the Banker Magazine “Top 500 Banking Brands 2020”, number one Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking published by The Banker Magazine, Best Bank in Nigeria 2020 in the Global Finance World’s Best Banks Awards 2020, and Bank of the Decade (People’s Choice) at the ThisDay Awards 2020.
Corporate Finance and Business Valuation redefined by Coronation Capital
Professor Aswath Damodaran took his time to provide practical guidance on the entire valuation process.
The word ‘valuation’ has been mistaken by several experts and audiences around the world as the process of pricing an asset. While some believe it is an opportunity for bargaining or negotiation between parties involved, lessons from the just concluded 2nd edition of the Coronation Capital Masterclass, which was tagged Corporate Finance and Business Valuation, suggests otherwise and the expert trainer provided a simplified process for carrying out company valuation.
The facilitator of the Masterclass, Professor Aswath Damodaran of New York University Sterns Business School took his time to provide practical guidance on the entire valuation process to the participants. According to him, “Valuation is not a science or an art, it is a craft that provides a bridge between values and numbers. Valuing an asset is not the same as pricing that asset. Valuation is driven by Cash-flows from existing assets, the growth in those cash flows and quality of the growth (which represents the risk in the process).
The Second edition of the Coronation Capital Masterclass which discussed “Corporate Finance and Business Valuation” with Professor Aswath Damodaran of the New York University Sterns Business School, unlike the first edition was hosted virtually due to the impact of the novel coronavirus on the globe which includes sustained travel restrictions.
Giving his opening remarks the Chairman of Coronation Capital Mr. Aigboje Aig-Imoukhuede said the masterclass was an attestation to the value placed by the Coronation Capital and its ecosystem on valuation of assets and its culture of continuous learning and development. He described himself as a student of Professor Aswath Damodaran and believed it was a privilege to learn from the scholar.
Here are 10 key takeaways from the NYU Finance Professor’s classes during the Coronation Capital Masterclass session.
- Valuation Is not a Science or Art, but a Craft
- Valuing an Asset is not the same as Pricing an Asset
- A Good Valuation is the expression of a Possible, Plausible and Probable story in numbers
- When developing stories from numbers, ensure to connect all drivers of value to valuation and keep the feedback loop open
- All Valuations are biased. The only question is how much and in which direction is the bias
- There is no precise valuation and “You don’t have to be right to make money, you just have to be less wrong than everybody else”
- As companies get larger, it gets more difficult to sustain value-adding growth
- The payoff to Valuation is greatest when it is least precise
- Simpler valuation models do much better than complex ones
- Always question but respect markets. The market is always right
“Valuation is a process that needs to developed, through understanding what the #company does, and ensuring the story is possible, probable, and plausible, it should not sound too abstract”. – @AswathDamodaran
Every Valuation starts with a narrative. In developing that narrative, the critical assessment of the following is crucial in providing a strong base of understanding about the business.
- The company (products, management & history)
- Present and future competition
- Macro environment in which it operates.