Economy and Business News (Part 2)

[HerachioBlo]

Buy Nigeria: Law makers approve Innoson vehicles for official use

On March 1, 2012 · In Motoring 1:52 am
BY TOMMY ANADUAKA

THE House of Representatives Committee on local content has approved the use of Innoson vehicles for its official activities. The approval was endorsed by the law makers after visiting the motor plant at Nnewi, Anambra State.

Chairman of the House Committee on local content, Asita Honourable said they came to verify the level of local input in Innoson vehicles which is part of their official responsibilities. He said that they were happy to discover that more than half of the auto components were locally produced and urged Nigerians to patronise the company.

“The Innoson Motor Plant at Nnewi is a huge honour to Nigeria. What is going on at Nnewi is an amazing feat which needs to be encouraged. This is not an assembly plant, but a full production site where Nigerian auto engineers are exhibiting their skills. We saw them and felt extremely impressed that such marvelous feat is exsisting in the country.”

He, therefore, stated that the committee would support Innoson by using its buses in carrying out official activities. “The high standard of Innoson vehicles has made us to endorse it for our jobs. We have resolved to make it an official vehicle for the assembly.”

The Chairman also praised the vision of the company chairman Chief, Dr. Innocent Chukwuma, saying that his ingenuity has added value to the manufacturing sector.

http://www.vanguardngr.com/2012/03/b...-official-use/

[èđđeůx]

FG to invest additional N326bn in Eleme Petrolchemical Company
http://www.vanguardngr.com/2012/03/f...mical-company/

The Minister of Trade and Investment, Dr Olusegun Aganga, has said that the Federal Government is to invest additional $2.1 billion about N325.5 billion in the Eleme Petrochemicals Company Ltd within the next three years.

Aganga made the announcement on Wednesday after inspecting the facilities and operations of the company at Eleme, near Port Harcourt.

He said that Indorama Group would also invest additional $2.1billion in three new plants in the company, adding that the country had the potential to be the hub of petrochemical industry in Africa “when the projects are completed”.

The minister said that when completed, they would complement the existing investment of about $575 million the Group had injected to revive the moribund plants which produced various petrochemical products.

Aganga said that Indorama Group had the second largest petrochemicals facility in Africa, second to South Africa, adding that it would not take long before the country achieved the target as the largest petrochemicals industry in Africa.

Speaking on the occasion, the Managing Director of the company, Mr Manish Mundra, said the Indorama Group was ready to partner with the Federal Government to make the country the global hub of petrochemical industry.


The Indorama Corporation, with headquarters in Indonesia, was founded in 1976, and operates in Singapore, India, Thailand, Egypt, Sri-Lanka and Turkey.

[Naijaborn]

Nestle Plans to double Nigeria business in 3 years

Nestle (Nigeria) has announced its full year 2011 numbers, with turnover coming in strong at N98.0 billion, 18.4percent higher than the N82.7billion reported for Full Year 2010. Although profit before tax recorded a marginal 1.6percent rise to N18.5billion, post-tax profits came in stronger by 33.4percent from N12.6billion to N16 billion.

Commenting on the food processors results, analysts at Vetiva, said Nestlé’s Quarter 4 (Q4) sales has beaten management estimates increasing by 4 per cent to N27.1 billion (from N25.9 billion) compared to management’s forecast of a 7 per cent de-growth, report from Vetiva Research has revealed.

According to them, the Q4 sales represent a 28 per cent contribution to total sales. Typically, Q4 contributes the largest to sales, which is lower than 29 per cent in the prior year. The Year-on-Year (YoY) increase in sales was, according to Vetiva, largely reflective of increased volumes and prices across its product portfolio, especially in Maggi and Milo, its flagship products. “This is on the back of increased capacity that came on board in the first quarter of 2011 at the Flowergate factory in Sagamu, Ogun state,” it states. It adds that input costs rose quite significantly by 30 per cent YoY to N57.2 billion from N43.9 billion in 2010, representing 58 per cent of sales.

Marketing and distribution expenses inched up 10 per cent, lower than expectations of an 18 per cent uptick. A higher marketing spend to support capacity increase was anticipated.

According to Vetiva analysts, of significance, finance charges spiked 324 per cent, owing to the loans from two local banks (secured in 2010 in a bid to reduce its foreign exchange exposure. As a result before tax earnings (PBT) came in relatively flat at N18.5 billion (2 per cent growth YoY).

Nestlé’s profit after tax grew 33 per cent YoY. This substantial leap was due to the pioneer tax status granted to Nestle by the Federal Government (to boost domestic manufacturing. Government awards tax concessions to companies investing in the productive aspects of the economy). This provided some relief, thereby boosting bottom-line performance which would have otherwise been flat (applying a 30 per cent effective tax rate as against the 9 per cent actual).

Management has provided Full Year’12 guidance which shows improvement in sales and PAT of 15 per cent and 0.5 per cent respectively. Nestlé is expected to slightly outperform this forecast (Vetiva estimates sales growth of 17 per cent and PAT growth of 2 per cent) even as cost pressures (particularly on input and finance) remain.

The analysts revised Target Price (TP) stands at N418.67, which yields an upside potential of 5 per cent on current price of N400; hence, their neutral rating.

Meanwhile Nestle Nigeria Plc plans to spend more money on boosting output of its leading brands to increase sales in Nigeria.

The local unit of Nestle SA (NESN), the world’s largest food company, has invested over 400 million Swiss francs ($445 million) in Nigeria since 2003, opening its second factory at the start of last year and is planning to invest a further 83 million francs this year, Chief Executive Officer Martin Woolnough said in Lagos.

“We’ve got a lot of money going into the country and that will be to do with improving capacity on our key brands,” he said.

Nestle forecast last year that it could double the size of its business within three years in Nigeria, currently its second-biggest market in Africa after South Africa. Annual sales at the time in South Africa were close to 1 billion francs compared with 550 million francs in Nigeria, according to the company.

Maggi food-seasoning products, Milo chocolate-malt drink, and Golden Morn cereal are Nestlé’s best-selling products in the nation of over 160 million people and will be the focus of the expansion, Woolnough said.

Nestle Nigeria posted a 33 percent jump in full-year net income of 16.8 billion naira ($107 million) for the year end Dec. 31 2011 as revenue advanced 22 percent to 98 billion naira. The company started exporting products to other central and West African countries last year, earning about 1.7 billion naira, Woolnough said.

http://www.businessdayonline.com/NG/...ess-in-3-years

[Naijaborn]

Julius Berger faces challenges as new entrants gain ground

image hosted on flickr

With over 40 years of successful dominant operation in Nigeria, business prospects seem to be growing dim for Julius Berger Nigeria Plc in recent times following the rapid expansion of other big competitors.

After building the Eko Bridge in 1965, which was its first project in the country, the German construction giant has carried out various world class structures spanning roads, bridges, building, oil facilities, and so on, while standing out with its quality and timely project delivery.

The company seems to have been strongly challenged recently by the presence of other foreign construction companies who are fighting hard to break into their acclaimed dominance. Julius Berger had targeted to carry out the N220 billion Lagos-Badagry expressway expansion project, an ambitious project by the Lagos State government aimed at opening up the West African market to Nigerian businesses as well as exposing the state’s tourism corridor.

While the company’s job on the Lot 1 of the project spanning Mile 2 to Orile was nearing completion, it participated and lost in the bid for the Lot 2 covering Maza-Maza to Agbara, along with three other companies: Moreno- Marina – Lagoon Plc , Salini Nigeria Limited, and CGGC Global Projects Nigeria Limited.

The project was, however, clinched by China Civil Engineering and Construction Corporation (CCECC), a Chinese construction giant that is fast gaining ground with many projects spread across the country, including the over $500 million light rail project in Lagos State. CCECC which has established itself as a top international brand in Nigeria for over 30 years now is said to have gained huge recognition in the country due to its localisation strategy.

By 2010, the company had employed over 20,000 workers in 70 projects, some of whom were trained in China to acquire the latest technology in the construc IKEJI tion industry. According to Shi Hongbing, deputy general manager of the company, local employment has made a great contribution to the company’s rapid development in Nigeria.

This, he noted, has not only created jobs in Nigeria but also reduced the labour costs for his company. One of the issues that affected the smooth operation of Julius Berger was security threat at the wake of kidnappings in the country. In 2009, for instance, the company abandoned the East-West Road project as a result of the abduction of its expatriate staff by the Niger Delta militants, while the project was re-awarded to Setraco Nigeria Limited at the cost of N75 billion.

The company’s reputation has also at various times been tampered with alleged involvement in bride for contract which ran into millions of US dollar. Just few weeks ago, the Senate Committee on Works asked the Federal Government to stop awarding contracts to the German civil engineering giant for failing to participate in the road concession programme.

The committee chairman, Ayogu Eze, decried the situation whereby Julius Berger and other multinational construction companies have enjoyed huge patronage from the Federal Government yet they have not deemed it fit to contribute to road rehabilitation in the country. “Despite the patronage multinationals are enjoying from government of the federation, they have maintained studied distance from our development programmes,” Eze stated.

For these companies to be awarded any road contract henceforth, the committee recommended that they should be made to take up at least two major roads on concession.

http://www.businessdayonline.com/NG/...ts-gain-ground

Competition, is always Great news.

[SUNS 25]

julius berger is German, so good quality work and cost of construction while High. CCCE is Chinese, so lower quality of work and lower cost. I prefer me Julius Berger, the roads will last at least 25 years.

[Tbite]

Julius Berger is not German and it has not been a majority German Company for a very very long time, I don't know why Nigerians think they are a German Company. They are partly German, but mostly Nigerian.

Julius Berger is not Bilfinger Berger! Bilfinger Berger is just the parent company. Bilfinger Berger for a long time owned 49% of Julius Berger, the rest was owned by Nigerians which meant it has been Majority Nigerian for a very long time.

Julius Berger is owned mostly by Nigerian investors (Source: Julius Berger) and employs mostly Nigerians! They operate in Nigeria exclusively. In fact every year Julius Berger becomes more and more Nigerian, with local investment and participation increasing and the stake of Bilfinger Berger decreasing.

Recently the stake of Bilfinger Berger decreased to 39.9%, which means Nigerians now own 60.1% of Julius Berger......how does that make it a German Company? (Source: Bilfinger Berger)

[Naijaborn]

Well, It all depends...... Chinese companies, can do Quality job, but, the quality of work. they deliver to you, depends on what standard you demand.
If just want a road.... then fine, they will construct a Road. But If you want a QUALTY road.... they will also deliver to you, a quality road.

[SUNS 25]

Originally Posted by Tbite

Julius Berger is not German and it has not been a majority German Company for a very very long time, I don't know why Nigerians think they are a German Company. They are partly German, but mostly Nigerian.

Julius Berger is not Bilfinger Berger! Bilfinger Berger is just the parent company. Bilfinger Berger for a long time owned 49% of Julius Berger, the rest was owned by Nigerians which meant it has been Majority Nigerian for a very long time.

Julius Berger is owned mostly by Nigerian investors (Source: Julius Berger) and employs mostly Nigerians! They operate in Nigeria exclusively. In fact every year Julius Berger becomes more and more Nigerian, with local investment and participation increasing and the stake of Bilfinger Berger decreasing.

Recently the stake of Bilfinger Berger decreased to 39.9%, which means Nigerians now own 60.1% of Julius Berger......how does that make it a German Company? (Source: Bilfinger Berger)

Tbite,
the expertise of the company is 90% German.

[Tbite]

What do you mean by expertise?

What defines a company is the stake! (Stake....= Investment....= everything. Without the investment, there is no company).

if a company has a 60% Nigerian stake...it is a Nigerian company

if a Company has a 60% Japanese stake...it is a Japanese company.

The labourers are Nigerian, most of the investment comes from Nigeria, most of the resources comes from Nigeria, all their projects are in Nigeria.

Their growth was spurred by Nigerian windfall in the 70s, everything about them is moreso Nigerian than German.

Julius Berger call themselves a Nigerian company, Bilfinger acknowledges it is a Nigerian company. The only people calling it a German company are outsiders.

Don't take information from Journalists so seriously, most Nigerian journalists are not that well educated.

[SUNS 25]

Tbite,

Expertise: engineering, management, technology, cost, time....

[SUNS 25]

I have seen several videos on youtube where I saw the Germans in control of many road projects in Lagos and Abuja. example the construction of the central bank of Abuja and now Lagos, It is the German genius.

[Tbite]

Julius Berger and Bilfinger Berger operate as two different companies...they work together but with the increasing stake of Nigerian investors...the German factor is dying.

Julius Berger has bought or is in the process of acquiring the engineering and services arm of Bilfinger in Nigeria so even the engineering aspects are mostly Nigerian.

Most of Julius Berger is Nigerian Local Content.

A Nigerian Engineering company just acquired 10% of Julius Berger.

When you have a stake in the company, you own certain aspects of the company. So as the stake of Julius Berger decreases, even the technical aspects are increasingly Nigerian.

[SUNS 25]

Tbite,

Julius Berger is the multinational Bilfinger Berger in Nigeria. only that it works with another entity. In Gabon, EDF (Electricity of France) has as an entity SEEG (energy and water company in Gabon). SEEG is yet an entity to 51% of EDF.

[Tbite]

The Company will soon be 80% owned by Nigerians and you will still be saying it is German



Julius Berger was established as a subsidiary of Bilfinger Berger. It is now a Majority Nigerian company and its own company.

Bilfinger Berger is selling most of its stake!

[Naijaborn]

But, why is it selling most of the stake??
The German Mother company, is 'running', from risk associated with Operating in an African environment????

[megacity]

Solid mineral’s contribution to GDP rises to 11%
March 2, 2012
By Oscarline Onwuemenyi


The Federal Government has noted that contribution by the solid mineral industry to the nation’s economy may have risen to about 11 percent in the past one year.

The drastic rise from less than three percent over the years has been attributed to the recent reforms in the sector, which has enhanced operations within the sector as well as paved way for private investment by foreign and local companies.

The Minister of Mines and Steel Development, Arc. Mohammed Sada, stated this in an interview with our correspondent in Abuja, in the background of the Public Presentation of the Interpretation Products of the Airborne Geophysical Survey of Nigeria Phase 2 and Geological Survey by the Nigerian Geological Survey Agency, NGSA.

Sada noted that, “Nigerians are already benefitting from the reforms in the mining and minerals sector. The reports we are getting now is that the contribution of the sector has risen to about 11 percent.

“Go out there and see: people are making a lot of money from mining in the country. This is why despite the supposed dangers that are associated with the activity, many more people are going into the sector and making a lot of money.

“The benefits to individual operators are apparent, but what we need to do is to streamline the process properly, and to find ways to make it contribute more to the coffers of government.”

He added that, “We also know that there is a lot of revenue coming from the sector that is not declared nor accounted for by the operators. Our work is to ensure more effective regulation that will ultimately improve efficiency and accountability as well as reduce or eliminate corruption.”

He explained that most of the small and artisanal mining activities still remain informal and therefore does not remit much to the Federal government in forms of tax and royalties, adding that his ministry’s focus was to improve regulations that would make it easy for small and artisanal miners to be formalized.

According to the Minister, the solid minerals sector remains one of the fastest growing sector in the economy, with the potential of replacing oil as the major source of revenue to the government.

He noted that, “Nigeria we all know is richly endowed with a wide range of solid minerals which, if properly managed and exploited, has the potential of becoming the springboard of our non-oil economic growth. Of remarkable importance is the fact that ere is no state in the country without the presence of at least one type of solid mineral deposit.”

He added that by its nature, the mining industry has a capacity for both backward and forward value chains that can sustain wealth creation, employment generation, poverty reduction, development of rural communities, and production of feedstock for local industries.

Sada explained that as of today, more than thirty-eight foreign companies holding 421 exploration licenses have commenced exploration activities in the country, adding that the first major gold mining company was already operating in Osun State, Messrs Retel Mining Limited, where the occurrence of over 620,000 ounces of gold has been established by the firm.

The Minister acknowledged that a lot of revenue coming from the sector is lost due to poor monitoring and ineffective structure, noting that most of the discrepancies within the would be corrected with the proposed audit of the industry to be conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).

“On the Ministry, we have also inaugurated a committee on revenues to help the government focus on expanding revenue collection from the sector to enable government provide those infrastructural services that are needed to build a more vibrant economy,” Sada added.


source

[Naijaborn]

Whaaaat!!!! WOOW!!

[Tbite]

Originally Posted by Naijaborn

But, why is it selling most of the stake??
The German Mother company, is 'running', from risk associated with Operating in an African environment????

Nigerian Government forced it to, although they are saying it is because they want local participation.

Nigerian Government forced their hand, because of bribery scandals involving the company.

[Tbite]

Originally Posted by Naijaborn

Whaaaat!!!! WOOW!!

Enough of this 'Oil is our resource' nonsense.

We have 34 solid Minerals in commercial quantity, Gas in abundance and other resources. It is time to start producing them in larger quantities.

Experts say that Nigeria's mineral sector as a whole could be larger than Nigeria's oil sector

Experts also say the Gas sector could be larger.

[JoblessBeggar]

Originally Posted by SUNS 25

julius berger is German, so good quality work and cost of construction while High. CCCE is Chinese, so lower quality of work and lower cost. I prefer me Julius Berger, the roads will last at least 25 years.

A hangover of Western colonization. The Chinese do very high quality work (they only lag behind the West in high technology, not road technology or engineering), but they tend to keep cost down by localizing a lot of their labor in Nigeria (unlike the Western oil majors who are still bringing in foreign artisans and technicians).

PS: Furthermore, Tbite is right about JB essentially being a Nigerian company (and has in fact been so since the 1970s), albeit with a strong relationship with B+B.