The Nigerian Stock Exchange Consumer Goods Index (CGI), an index that tracks the performance of consumer goods companies, contracted by 1.46%, to close at 531.97 index points in the week that just finished amidst selling down in the shares of Nigerian Breweries, Dangote Sugar, and International Breweries.
A preview of the performance of the index revealed that at the close of trading activities on Friday 19th of March 2021, the NSECG index depreciated by 1.46% to close the week lower at 531.97 index points, from 528.32 index points at the open of trade for the week.
In line with this, the Consumer Goods Index lost a total of 7.88 index points, retracing the previous week’s gains of 2.18%, by about 67%.
The index also underperformed the market index, noting that the All-Share Index and the market capitalization depreciated by -0.69%, to close the week at 38,382.39 points and N20.082 respectively.
What you should know
- The NSE Consumer goods Index was designed to provide an investable benchmark to capture the performance of companies in the consumer goods sector. The index comprises the most capitalized and liquid companies in food, beverage, and tobacco.
- The index is based on the market capitalization methodology, as it tracks the performance of fifteen consumer goods companies on the Nigerian Stock Exchange which includes, Nestle, Nigerian Breweries (NB), Dangote Sugar, and International Breweries.
- The overall performance of the companies was relatively bearish, as the index closed on a negative note retracing the previous week’s gains by 67%.
- NNFM (9.73%) led the gainers’ chart, followed by GUINNESS (7.66%), while NB (-5.34%) topped the losers list, followed closely by DANGSUGAR (-5.29%).
- NNFM up by 9.73% to close at N6.20.
- GUINNESS up by 7.66% to close at N25.30.
- NASCON up by 6.43% to close at N14.90.
- VITAFOAM up by 6.12% to close at N7.80.
- NB down by -5.34% to close at N47.00.
- DANGSUGAR down by -5.29% to close at N17.00.
- INTBREW down by -3.77% to close at N5.10
- PZ down by -3.00% to close at N4.85.
Flour Mills acquires 5,200 hectares of land, sets N160 billion as cost of the new expansion project
FMN’s investment in the sugar industry highlights the importance of the sugar value chain and the company’s support for the FG’s economic diversification agenda.
Flour Mills of Nigeria Plc, a leading brand in the food and agro-allied industry in Nigeria, has announced the upland acquisition of an additional 5,200 hectares of land in Sunti Golden Sugar Estates located in Mokwa, Niger state, in line with its expansion plans.
The company also revealed that the total projected cost to achieve this bold plan is set at a minimum of about N160 billion, including the new Sugar mill at Nasarawa.
According to a statement issued by the leading agro-allied company, the acquisition of the land is in line with Flour Mills’ commitment to the backward integration strategy of the Nigerian Sugar Master Plan (NSMP), and the overall growth vision of the Sugar industry in the country.
The new 5,200 hectares of land acquired by the flour miller will expand the total land size of Sunti Golden Sugar Estates to about 22,000 hectares of land, with the total land area under cane cultivation now coming up to 15,000 hectares.
What you should know
The news of the land acquisition by Flour Mills comes weeks after claims of involvement in price-fixing and arbitrary collusion to create sugar scarcity were made against the company in a letter written by the founder of the BUA Group, Abdulsamad Rabiu to the Minister of Industry, Trade and investment, Niyi Adebayo.
Abdulsamad in his letter added that among the three players in the Nigerian sugar industry, only BUA Sugar Refinery has made serious investment commitment to the backward integration strategy of the Nigerian Sugar Master Plan (NSMP).
Why this matters
Flour Mill’s investment in the sugar industry highlights the importance of the sugar value chain, and the company’s support and commitment to the Government’s overall strategy of raising the profile of agriculture while diversifying the economy.
Hence, the expansion plan of the Golden Sugar Company, a subsidiary of the Flour Mills of Nigeria Plc is an effort to immensely increase the production capacity of the sugar estate, in a bid to drive the attendant expansion of the sugar production capacity of the mill, as the company will have over 25,000 hectares of land under cane.
Other proposed investment in this line will ensure that production is ramped up to approximately 250,000 tonnes of sugar per year. This will significantly increase local sugar production, reduce dependence on food imports, and save the country’s foreign exchange.
Expansion plans by other players in the industry
- BUA Group recently disclosed that it has invested over $300 million in Lafiagi Sugar Company (LASUCO) in Kwara State, which is in an advanced stage to completion.
- LASUCO, which is an integrated milling factory that will comprise of a 20,000-ha sugar plantation, a 10,000tcd sugar mill, a 220,000mtpa sugar refinery, 20,000,000 liters per annum ethanol plant, and a 35-megawatt power plant that will be integrated into the national grid.
- Dangote Sugar Refinery on the other hand revealed that the Company had commenced rehabilitation and expansion of the Savannah Sugar Company Limited Sugar Factory at Numan, with a key focus to increase production capacity by 6,000 tons of cane per day (TCD).
- The company also noted that Sugarcane planting has also commenced in two other BIP locations. Regrettably, due to community dispute over the land acquired in Niger State, projected activities have not commenced in Niger State.
Burger King to open first outlet in Nigeria by Q4 2021
Burger King is expected to employ about 6,000 people (direct and indirect) in Nigeria between 2021 and 2026.
Burger King, an American multinational hamburger fast food chain, is expected to start its operations in Nigeria by the fourth quarter (Q4) of 2021.
The company is also expected to employ about 6,000 people (direct and indirect) in the country between 2021 and 2026, other things being equal.
These were disclosed by Antoine Zammarieh, the Franchisee of Burger King in Nigeria and Managing Director, Allied Food & Confectionary Services Limited, in an interview with Nairametrics on Tuesday.
He said, “Burger King will start operations by Autumn, i.e between September and November 2021. We have set up the Quality Control unit and have met some of our local suppliers to seal the deal. Also, we have sent some of the ingredients to America to test quality.
As a company, we are delighted to enter this new market being the largest country in Africa and are looking forward to serving our future guests with our world-famous Burger King meals.
Most importantly, our goal is to positively contribute to the economy by creating more jobs and employment opportunities. In five years, we hope to directly or indirectly employ between 5,000 and 6,000 people in Nigeria.”
Zammarieh added that the hamburger maker, in a show of interest in the Nigerian market, had signed a development agreement for the Nigerian market.
He explained that the development agreement of the chain in Nigeria, which was recently signed, would give more confidence to the Nigerian market and consumers in general, especially during these hard times.
What you should know
Nairametrics had reported, three weeks back, when Zammarieh said, “I always believed in Nigeria and in its people. I am confident this venture will go a long way and prove successful for Burger King, Nigeria, and our company.”
“I believe this will be a tremendous step towards giving more confidence to the Nigerian market and consumers in general.”
What to expect
The first outlet of the hamburger chain in Nigeria is expected to be launched in Lagos.
The Florida-based restaurant chain is set to join the likes of Dominos Pizza, Krispy Kreme, KFC, and Chicken Republic (pieXpress) in a stiff competition for market share and dominance in a saturated market, with hundreds of other traditional restaurant chains.
Burger King is expected to dig deep into its quiver of strategies to ensure an impressive performance and success in its first year of operation, as other players have been having it tough following their respective launches into the Nigerian market.
The COVID-19 pandemic however has affected the fast-food industry severely, as the disruption to the industry’s supply chain, especially the on-trade channel, which accounts for a significant percentage of restaurant sales, triggered declines in their profits in 2020.
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