This Corporate News Compilation for the week ended April 14th, 2018 is brought to you by Bluechip Technology Ltd Nigeria.


1. We start with a piece of breaking news that we received as we were preparing for this thread. Konga announced it was merging with Yudala in a much-anticipated deal.

According to the press release obtained by Nairametrics, the “merger of their operations which will see them effectively become the biggest organized retail and e-commerce/marketplace outfit on the African continent.”

The merger also takes effect on the 1st of May 2018. Konga will now have two CEO’s, Nick Imudia who will be in charge of online among others and Prince Nnamdi Ekeh who will be responsible for offline.

Something inside me likes the way this merger is shaping up and for the first time, it appears we may just have found the right model for e-commerce in the country.


2. Uber Nigeria on Tuesday launched a new app for its Partner drivers. The new app will include an earnings tracker and also includes a new status bar feature that allows their drivers to decide their next location based on a spike in requests.

Drivers can now also see messages about upcoming earnings opportunities and feedback from riders. These are all part of Uber’s “180 days of Change” initiative targeted at drivers who have demanded a review of Uber’s operational processes.

Please be reminded that Uber reported a loss of $4.5 billion in 2017 and has lost significant market share in most countries where it operates.


3. Google Nigeria launched the Google Go app last week. Google claims it is a search app built specifically for the African market which is mostly characterized by slow internet connectivity.

The app is the lighter version of the Google Search app as it and performs like an ecosystem for all the things you love to use Google for. For example, it organizes trending topics, quick search functionality, images and GIF search, and voice all in one space.

Some of the more negative reviews we have read about this app point to the fact that you still need to go outside of the app if your search requires that you use a browser. User will prefer that google integrate the app with a chrome browser.

This app is surely targeted at Opera Mini, which remains the number one browser in Africa. You won’t be able to download this app of your app store is set outside and, in the US, or Europe.

Google-Headquarters


4.Vodacom and Intelsat sent a loud message to the broadband market in Nigeria following the announcement of a partnership agreement.

Here is an excerpt of their press release, Vodacom Business Nigeria and Intelsat signed an agreement for satellite services to expand its enterprise broadband networks and enable new and enhanced services throughout West Africa, “Under a new multi-year agreement, Vodacom Business Nigeria will utilize the satellite services on Intelsat 35e to deliver fast, high-quality and resilient broadband connectivity to the banking, oil and gas, and enterprise sectors across West Africa.”

Is this a direct threat to Globacom, MTN, MainOne’s market in Nigeria?


5. The Executive Vice Chairman, NCC, Prof. Umar Danbatta confirmed that MTN NG has now paid N164 billion out of the N330 billion fine imposed on the company.

Take a deep breath and rummage on that amount again. Anyway, they have N166 billion left to pay.

According to Danbatta the NCC received a “cheque of N55 billion in the last two weeks.” I had thought there was a cap on how much can be issued for cheque transactions in Nigeria?

Danbatta also revealed that the National Frequency Management Council had decided that the firm should retain the controversial frequency it acquired from the NBC for N30bn on the condition that “they use it for telecommunications services instead of broadcast services.”


6. The challenges with doing business reared its head last week when two states accused Globacom of not paying its taxes and threatened to seal their premises.

Kano State House of Assembly setup an ad-hoc committee on outstanding tax and liabilities for GSM companies.

According to their investigation, Globacom owed the state government N47 million in taxes. The taxes they claim are for the number of masts mounted by the company.

Katsina state on the other hand, claims that Globacom owes N400m in taxes for “tenement rates” and also threatened to seal up their offices.

glo office1


7. Alta Semper Capital, a private equity firm based in London, announced that it was investing $18 million into HealthPlus Ltd.

The fund is expected to be used to expand the ever-growing retail footprint of the company in the country. Alta Semper explains that it “specifically invests into market-leading businesses in defensive sub-sectors within the consumer and healthcare verticals.”

Bukky George, the Founder & CEO of HealthPlus, provided an insight into how the investment will help the company.“We believe Alta Semper is the right partner for our next stage of growth.

Alta Semper’s focus on the healthcare sector, as well as its ability to invest patient and flexible capital, will allow us to grow strategically across Nigeria and further our mission to provide high quality and affordable healthcare products and services to a market that is large and growing.”healthplus1


8. Medview Airline explained that it suspended its international operations because two of its aircraft were undergoing maintenance abroad and will resume service once they are back.

“The suspension of operations into some of our international routes has to do with our two aircraft- B767-300ER for cabin reconfiguration and B737-500 undergoing maintenance. They have nothing to do with threats or any debt burden.”

Medview thought it was important to explain as rumour suggests that it was due to its debt burden, claiming that owing is “normal” for airlines because it “accumulates debts” everyday it operates.

Medview flies about 9 international destinations including London, Dubai and West African Routes.


‏9. The AfreximBank and Russian Export Centre on Wednesday introduced a new Sukhoi Superjet (SSJ)100 and MC-21 aircraft to the Nigerian market.

The aircraft can carry between 100 and 200 passengers per flight. The SSJ100 is a flagship product of Sukhoi Civil Aviation Company, a Russian company founded in 2000 to develop new models of commercial aircraft. The SJ (Super Jet) 100 cost $35 million (N12.6b) while the MC-21 costs between $72 and $91 million.

Afrexim says it is on standby to fund support Nigerian carriers on “a leasing programme with up to 85 per cent of the initial payment.”

The interesting part of the story for me is that this is the first fruit of the partnership btw Afrexim  & Russians (no “collusion”, no Trump). Afrexim announced in January that SC Russian Export Centre (REC) had become the latest international financial organisation to join Afrexim as a shareholder following its successful subscription of its Class “C” shares.

Afrexim has 3 classes of shares, A, B and C. Class “A” shareholders are African states, African central banks and African public institutions, including the African Development Bank, while Class “B” is made up of African financial institutions and African private investors.

Class “C” shares are held by non-African investors, mostly international banks and export credit agencies, while Class “D” shares, a tier approved in December 2012, are shares that can be held by any investor.


‏10. Guinness Nigeria Plc announced that it was partnering with Wecyclers to support Guinness Waste Management agenda.

Guinness CEO, Peter Ndegwa, explains that the partnership is in line with Guinness Nigeria’s commitment to reducing its environmental impact across its operations and throughout its supply chain.“

This partnership with Wecyclers is in line with our commitment to reduce our environmental footprint as well as join the global movement to advance sustainable development.” So where is the money here, you might be wondering.

Wecyclers, makes money by gathering recyclable waste and delivering to manufacturers who can recycle the waste into new products. Guinness generates a lot of waste by virtue of its business, thus it saves a lot of cost if it gives Wecyclers access to its waste hoard while also meeting its sustainability goals.GuinessNigeria


11. Nigeria Breweries provided an insight into how it intends to confront the proposed excise duty set to be introduced in June by the Federal Government.

The company revealed that one of its strategies is to increase its local raw material sourcing. It wants the share of its raw materials utilisation to be 60% local from 50%. The company believes sourcing raw materials locally can help reduce its cost of production and should translate to better competitive pricing.

It also plans to increase storage of products to hedge against market volatility. The beer industry has been under pressure for years & it is not about to let off. The taste & fashion for beer drinkers in Nigeria typically dance to the tune of price and affordability.


12. So, with Mugabe gone, Nigerian Billionaire, Aliko Dangote has renewed his interest in investing in mine rich Zimbabwe.

Dangote Cement recently invested $400m in the country (though it did not disclose this in its annual report). He dispatched an advance team of geologists to the country last week and the team is expected to be in place for 10 days.

Dangote is interested in power generation, coal mining and cement production in Zimbabwe but it appears that coal mining is where their focus actually is. Dangote Group is said to import a significant portion of its coal from Zimbabwe.

Dangote Group owns 90% of Dangote Mining Zimbabwe (Private) Limited an SPV that we believe will be the entity for its mining activities in the country.


13. Kia Motors Nigeria has completed its “state of the art” service center located at 118 Oshodi-Apapa Expressway, Isolo, Lagos.

According to Kia, the center is one of the biggest in the country with “81 service bays. Kia also claims that customers will get the ACE advantage: affordable pricing, certified professional technicians, and exceptional service delivery. They also offered free vehicle health check to customers during the week.

Personally, my experience with service centers (like Hyundai) has been a nightmare so I do not know how good Kia Service center would be. For most motor users, the huge cost of servicing and maintaining vehicles in these centers means that most car owners still have to rely on the cheaper but unreliable Ladipo and road side mechanics to fix their cars.

There has also been a rise in auto repair shops across Lagos and one shop owner told us that they broke even within a month of operation.


14. Bosch Power Tools announced that it is partnering with Amicable Concerns Limited to launch “the first Power Tools experience center in sub-Saharan Africa, located in Lagos.”

According to Bosch, the center would meet the needs of professional users in the construction space as well as tradesmen, artisans and craftsmen assisting these users to meet the demands of the growing Nigerian economy, especially in the area of infrastructural development‏.


15. Nigeria’s investment space received another major boost after Indonesian tin mining company, PT Timah Tbk, announced that it will invest US$26 million or equivalent to Rp356.2 billion to realize the business expansion of the state-owned enterprise in Nigeria.

PT Timah will be teaming up with Topwide Venture Limited, a mining a Nigerian Mining Company. Both companies are expected to form a JV soon and hope to optimize the mining concession area of 16,000 hectares of land.

PT Timah’s Corporate Secretary, Amin Haris Sugiarto, also revealed that the “the first phase of production is expected to reach 5,000 metric tons per year. He is also confident that this amount will increase reserves and will make PT Timah the world’s number one tin producer.”

According to a report I read, “In the early 1900s, Nigeria was well known in tin mining and was the second largest tin producing country in the world, with Russia being at the lead but because of so much distraction by crude oil, Nigeria is currently in the 13th position globally and is ranked 3rd in Africa, with an estimation of 570 Metric tons after Congo DR and Rwanda respectively. Tin can be mostly found in Abuja, Plateau and Bauchi states. ”


16. During the week, Access bank launched a special USSD code which its customers can use to obtain loans instantly.

In collaboration with RemitNET , the facility is a PayDay loan that requires no collateral or guarantor, enabling its customers to obtain loans instantly without visiting the bank.

So basically, to access this loan, you need to have a salary account domiciled with Access Bank and I understand you have to work in a “reputable organisation” to qualify for the loan. The loans attract a 3% interest rate flat and is for a tenor of 30 days only. They collect their money back, including interest by deducting it from your salary once it is paid into your salary account. Access Bank sets the limit you can borrow.

Like I’ve repeatedly said, commercial banks have the financial muscle and technology to take on newer FinTech companies hoping to operate in this space. I guess the model for them is to go after the unbanked and those without good credit or who work in the informal market.


17. Linkage Assurance Plc revealed that it has secured an approval from the National Insurance Commission to commence the sale of its motor insurance policies online.

From what I understand, the platform covers both Motor Comprehensive and Motor Third-Party Plus insurance.

How does it work? well, according to them, customers will have to upload the images of their cars and provide personal data and car details via the online portal. ‏Customers can then make payments for the policy with the use of credit or debit cards or Linkage scratch cards following which they will get their insurance certificates and policy documents.

They also reveal that the portal will be open to insurance brokers and agents who are registered with Linkage Assurance Plc. The insurance sector is badly in need of tech-driven disruption but is this the solution? Will this product address the manual nature of operations in the industry.


18. InvestmentOne introduced a stock market gaming platform last week in “an effort to heighten interest in stock trading in Nigeria.”

The product called, All-Star League, is a gaming environment where individuals can interact with the Nigerian Stock Exchange (NSE) in near real time.

According to a statement from the company, each trader begins with N10,000,000 in virtual cash and has a trading limit of N2,000,000 per day. The top 3 traders at the conclusion of the 3-month League will have their trading accounts funded with real money as a reward.‏

Not the first time we have seen a product like this but I guess timing and execution have always been the challenge. The lack of interest in the stock market is very pervasive which is why we do what we do.


19.Cars45ng announced a partnership with Rensource, a renewable energy company in Nigeria.

The partnership will see Rensource deploy renewable power solution infrastructure to over 100 Cars45 inspection centres across Nigeria. They did not reveal if it’s free or a batter arrangement.

According to Cars 45, the deal ensures that they have 24 hours power supply in all their locations. I really will like to know how this arrangement is structured as it could be the right model for renewable energy penetration in the country.

If Solar distribution companies can secure deals with organisations with branches, it could help them sell solar power at a cheaper rate leveraging on economies of scale such a deal provides. Next will be estates and then streets.

cars45

1 COMMENT

  1. “I guess the model for them is to go after the unbanked and those without good credit or who work in the informal market.”

    Is this recommended model for the Banks or Fintech companies?

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