• Friday, March 29, 2024
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Gridlock forces NASCON out of Apapa, as company relocates 60 percent of its operations

NASCON-factory

Saddened by the perennial traffic gridlock on Apapa raod, NASCON Allied Industries Plc, a subsidiary of Dangote Industries Limited, has announced the relocation of some of its operations from Apapa to Oregun and Port Harcourt, the River State capital.

Paul Farrer, Managing Director, NASCON, told shareholders at the company’s Annual General Meeting that the Apapa gridlock affected the movement of raw materials to Oregun , timely delivery of finished goods to customers and increased turn-around time of the company’s trucks.

“We relocated 60 per cent of our Apapa Plant production capacity to our Oregun and Port Harcourt Plants to reduce the effects of the gridlock. We also engaged third-party transporters to ensure timely delivery of our finished goods,” he said.

NASCON, a refiner of industrial salt and distributor of household food processing, with an installed production capacity of 567,000 metric tonnes per annum, its Apapa factory, was inaugurated in 2001 with an installed capacity of 275,000MT per annum. The Port Harcourt refinery was inaugurated in 2003 with an installed capacity of 210,000MT per annum, while the Oregun plant was inaugurated in 2004 with an installed capacity to refine 82,000MT of salt per annum.

An analysis of the company’s full year 2018 result for the period ended December 2018 shows revenue of NGN25.77bn, which represents a 4.78percent decline from the NGN27.06bn recorded in the previous year. This was due to the weaker contribution from the sales of salt, which constitutes 80.57percent of the company’s topline while its tomato processing and vegetable oil plants lay idle. However, the revenue from its seasoning products and freight business grew by 20.76percent and 5.84percent respectively, with the latter accounting for 15.85percent of total revenue.

Its Q1 2019 result for the period ended March 2019 showed some marginal improvement as its revenue grew by 0.77 percent to N6.82 billion relative to N6.78bn in Q1 2018. The company recorded impressive growth in its Western and Eastern markets’ sales, which rose by 47.26percent and 12.74percent respectively.

The recorded growth was driven by its diversification to corporate clients rather than retail customers. However, sales from its Northern market, which currently accounts for 58.90percent as compared to 69.90percent in Q12018 of revenue, declined by 15.90percent (N4.01 billion vs N4. 73 billion).

In its bid to increase its product offering, NASCON commenced vegetable oil production at its Ota Plant with locally-sourced crude palm oil, while also planning to resume tomato paste production in 2019.

Shares of Nascon traded at N14.80 with its one year return down by 34.40percent.

 

OLUFIKAYO OWOEYE