Business News
PZ Cussons UK to sell Nigerian diary arm to FrieslandCampina WAMCO
PZ Cussons Plc has announced the proposed sale of its Nigerian dairy business, Nutricima to FrieslandCampina WAMCO Nigeria Plc.
The United Kingdom-based consumer products company, PZ Cussons has announced the proposed sale of its Nigerian dairy business, Nutricima, to FrieslandCampina WAMCO Nigeria Plc, an affiliate of Royal FrieslandCampina in the Netherlands.
This was disclosed by the former in a statement issued and seen by Nairametrics. Financial details of the transaction have not been divulged by either of the companies.
Nutricima manufactures and distributes beverages in Africa. Its product portfolio includes milk and yoghurt based drinks such as Nunu, Yo, and Olympic. Under Nunu brand, the company offers a wide range of powdered, evaporated and ready-to-drink (RTD) milk beverages, while under Yo brand. it offers yoghurt drinks, as well as an RTD yoghurt range.
Details: PZ Cussons exchanged sale agreements of the assets associated with Nutricima’s business with FrieslandCampina WAMCO Nigeria, an affiliate of Dutch multinational dairy cooperative Royal FrieslandCampina. Completion of the deal is subject to receipt of regulatory approvals in Nigeria.
In addition to this deal, PZ Cussons completed the sale of its Polish personal care brand Luksja to Athens based personal care company Sarantis Group.
READ ALSO: Full Year-2019: PZ Cussons’ profit declines by 40%
As part of the deal, Sarantis has also agreed to distribute certain PZ Cussons’ brands including Carex, Original Source and Morning Fresh in Poland and Central and Eastern Europe.
Speaking on the proposed sale of Nutricima, the Executive Chair of PZ Cussons, Caroline Silver said the deal is in line with the group’s strategy and that it would enable it to deliver high margin earnings, amongst others.
“The proposed sale of Nutricima and the sale of Luksja are further steps forward under our ‘Focus, Scale and Accelerate’ strategy, as we continue to streamline the Group to focus investment on core Personal Care and Beauty brands. This will enable us to deliver higher-margin earnings, in geographies which can scale, and support the return of the Group to sustainable, profitable growth,” Silver said.
What you should know: Through its WAMCO subsidiary, FrieslandCampina has a long history in Nigeria. It was incorporated in April 1973 as West Africa Milk Company Nigeria (WAMCO) and commenced operations in 1975. The company is an affiliate of Royal FrieslandCampina of The Netherlands, one of the largest dairy producers in the world.
READ MORE: Farmcrowdy acquires Best Foods to explore meat market)
About PZ Cussons Nigeria Plc: PZ Cussons Nigeria Plc is a subsidiary of Manchester-based PZ Cussons Holdings which owns controlling shares in the firm. It is a publicly listed Nigerian manufacturer and distributor of consumer products such as detergents, toiletries, soaps, and home appliances.
The company basically produces beauty and personal care, baby products, bath products, oral care, health care, fragrances, and skincare. Some of the popular products produced by PZ include soaps like Ava, Canoe, Elephant, Flourish, Joy, Morning fresh, Nunu and Premier, to name a few.
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Business
Why prices of Iron Ore, others may rise soon
The underdeveloped mining of iron ore in Nigeria has led the nation to import the mineral which can be produced locally.
Iron ore is an important commodity currently in high demand, due to population and infrastructure growth in developing countries, especially Nigeria.
The underdeveloped mining of iron ore in Nigeria has led the nation to import the mineral which can be produced locally. This development is expected to lead to an increase in the price of the commodity, as the nation relies solely on imported iron ore.
Why is the increase imminent
A surge in steel consumption is certain, as the world emerges from its pandemic-induced slump. This is set to drive iron ore to an unprecedented high as the biggest miners struggle to keep up with the frenzied pace of demand.
An Estate Surveyor and Developer, Tunji Lawal, told Nairametrics that expectations are that benchmark prices can get to $200 a ton – topping the record $194 hit more than a decade ago.
According to him, this is happening as Chinese steel producers ramp up production in defiance of government attempts to rein in output to control the industry’s carbon emissions.
He said, “That’s tightening an iron ore market that hadn’t fully recovered from a supply shock more than two years ago.
Iron ore prices could go higher in the short-term and exceeding $200 a ton is definitely possible and that will also push the price up in Nigeria. The price here, which is about N325,000/ton (8mm), is bound to go northward and may increase by N100,000 within a month.”
He added that the increasing demand had been boosting steel prices from Asia to North America.
The hike is not limited to steel, as other building materials are also expected to rise further.
Meanwhile, Dangote Cement, which increased from N2,600 to N3,800 barely a month ago, stands at N4,000/bag and still counting. The price may rise over N4,000 depending on market forces.
Lafarge Cement and BUA Cement also increased from N2,400 and N2,250 to N3,600 and N3,250 respectively, within the same period. Their prices may also rise further.
Tunde Oluwole, a fellow of the Nigerian Institute of Builders, explained that the development was caused by high-interest rates, inflation, increasing exchange rate and scarcity of forex in the country.
He said, “The increasing prices in Nigeria is a result of the combined effects of high-interest rates, devaluation of the naira, inflation, and non-effective distribution network of the materials.”
What you should know
The mining of minerals in Nigeria accounts for only 0.3% of its gross domestic product, due to the nation’s overdependence on its vast oil resources.
China accumulated a majority of the global iron ore imports in 2019, with a 69.1% share of total global imports. Japan followed behind distantly with a 7.5% share of iron ore imports.
