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Business News

Shoprite’s owners to leave Nigeria after 15 years

Shoprite announced its plan to sell off its Nigerian operations.

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Shoprite’s sales drop by 8.1% in Nigeria in H2 2019 over Xenophobic attacks

South African retailer, Shoprite International Limited announced earlier today that it is considering a potential divestment from its Nigerian operation – Retail Supermarkets Nigeria Limited.

This was disclosed in the company’s latest operational and voluntary trading update which was published this morning.

Backstory: The South African retailer has been struggling in Nigeria in recent years owing largely to increased competition and government policies such as border closures and local production of consumables. Nairametrics reported in April that Shoprite Nigeria lost 8.1% of sales in the H2 of 2019, which was related to the September 2019 xenophobic attacks.

Meanwhile, Shoprite is not the only South African company that has recently announced exit from Nigeria. Nairametrics also reported that another South company,  Mr. Price, would be exiting Nigeria to focus on the South African market. Already, the company has closed 4 out of its 5 retail outlets in Nigeria.

Unfortunately, Nigeria’s ‘difficult’ business environment has been blamed for these major divestments.

Shoprite, which has spent 15 years in Nigeria stated that customer visits for the year declined by 7.4% due to the pandemic lockdowns. It also noted that outside South Africa, sales only increased by 0.1%, and an overall decline in sales of 1.4% for the year.

“Following approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria, the Board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited.

“As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time,” the update read in part.

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Shoprite joins two other South African retailers, Mr. Price and Woolworths who have also announced exists from Nigeria due to a harsh operating environment.

What this means: Shoprite’s exit from Nigeria once again brings to the fore the challenges South African companies are facing in Africa’s largest economy as they try to replicate the successes of MTN.

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  • Shoprite is a flagship retail outlet in Nigeria and has been the major anchor tenant for shopping mall developers in Nigeria.
  • With their exit, funding for the development of shopping malls in Nigeria could be in jeopardy as anchor tenants are the major drivers of mall constructions. However, the new owners, could sustain this drive and continue to expand beyond its current coverage locations.
  • The future for Shoprite and its employees will now depend on the ability of its South African parent company to find buyers.

 

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    Business News

    BUA Group, French company announce progress in 200,000 bpd refinery project

    This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

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    The BUA Group and Axens, a French-based petroleum technology company, have both signed a progress acknowledgement statement for the proposed BUA multi-billion-dollar integrated 200,000 barrels per day refinery in Akwa Ibom State.

    This is coming about 6 months after both firms signed an agreement for the supply of process technologies and the design of the facility.

    BUA, while making the disclosure in a statement on Wednesday, April 14, 2021, said that the French President, Emmanuel Macron, commended its Chairman, Abdul Samad Rabiu, for his commitment to developing lasting relationships between French and Nigerian businesses.

    READ: What the $1.5 billion Port Harcourt refinery deal means to us – Maire Tecnimont

    The statement said that this came as the French Minister for Foreign Trade and Economic Attractiveness, Franck Riester, paid a visit to the BUA Group Headquarters in Lagos where he handed over a personal invitation from Macron to Rabiu to attend the Choose France Summit in June in Paris representing business leaders from Nigeria and Africa.

    The French minister also witnessed the signing of a progress acknowledgement statement between BUA Group and Axens of France for the proposed refinery project, according to the statement.

    The statement also said that during the visit, it was announced that the BUA chairman had been appointed Chairman of the France Nigeria Investment Club.

    READ: FG reacts to reports of revoking 32 refinery licenses

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    While thanking the minister and Macron for their unwavering support in bringing BUA and French businesses together, Rabiu said BUA had so far initiated partnerships and had developed personal relationships with a few French businesses, including Axens.

    He expressed confidence in the quality of expertise and technical know-how of the French companies BUA had partnered with.

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    Rabiu pointed out that the BUA refinery would reduce the huge cost of transporting Nigerian crude offshore, refining it and bringing it back into the country when fully operational.

    READ: Abdulsamad Rabiu’s stake in BUA Cement has increased by N1.2 trillion in value since listing in 2020

    He said that the choice of Akwa Ibom for the refinery was due to the huge availability of raw materials and its proximity to export petroleum products to regional countries.

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    The President of Axens, Jean Sentenac, in his statement, said he was pleased that the project was advancing on schedule and expressed delight for the very good cooperation between all the involved parties, reiterating the commitment of Axens in delivering the BUA Refinery Project on time and with the highest standards.

    READ: FG to open LPG distribution channels in all local governments

    Bottom line

    The completion and take-off of the refinery owned by the BUA Group would come as a huge boost for the Federal Government’s effort to stop the importation of refined petroleum products, ensuring that the country becomes a net exporter of these products.

    This will also help to conserve the scarce foreign exchange as the completion and take-off of the Dangote refinery and other similar refinery projects will help ensure self-sufficiency in the country.

    The BUA Group, just a few days ago, was listed as one of the companies with an active refinery license from the Department of Petroleum Resources (DPR).

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    Coronavirus

    Covid-19: Nigeria records over 1 million vaccinations

    The NPHCDA has stated that it has vaccinated 1,043,737 persons, which is 51.9% of the targeted total proportion.

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    Covid-19: First world nations oppose waiving intellectual rights for vaccine development

    The National Primary Health Care Development Agency has disclosed that Nigeria, as of April 14th, 2021, had vaccinated 1,043,737 persons, which is 51.9% of the targeted total proportion.

    The NPHCDA revealed this in a statement on Wednesday evening.

    Kwara State leads in the vaccination percentage of target reached, at 110% with 30,708 vaccinations.

    READ: Only 10 countries have administered 75% of all vaccinations – UN Secretary-General

    Meanwhile, Lagos State has conducted the most vaccinations so far at 192,061 representing 75.7% of its percentage target reached so far.

    The Federal Capital has vaccinated 40.1% of its target so far at 44,098 and Kogi State has conducted the least number of vaccinations at 5,568.

    READ: Covid-19: Pope Francis set to get vaccinated, says its ethical

    In case you missed it

    Nairametrics reported earlier that the Nigerian government aimed to get 70 million Johnson and Johnson single-shot COVID-19 vaccines after the African Union recently announced a deal with the drugmaker for 400 million vaccine doses.

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