BY WILLIAM JIMOH
McNichols Consolidated Plc said it plans to leverage the new Nigerian sugar master-plan to expand its sugar production with a view to boosting shareholders value.
Chimaraoke Ekpe, the company’s Chief Executive Officer disclosed this, Friday, while ringing the closing bell on floor of the Nigerian Stock Exchange.
He said that the company will inject fresh capital for the expansion project through the banks, internally generated revenues and through vendor financing.
“We are expanding our capacity to about 300 percent. The key purpose of this is to take advantage of the new Nigerian sugar master-plan which was launched January 1st this year which places a restriction on the importation of sugar.
“We are building a sugar mill to meet the critical raw materials which we lack, that is the brown sugar. For the other raw materials, they are very much available in the market” he said.
Mr. Ekpe maintained that the company will at the end of its expansion expect a very huge market demand, a reasonable market growth above an average of what it has currently and which will impact positively on the company’s bottom line.
Commenting on the inability of the company to declare dividend over the past few years, Ekpe said, “We have not been performing below expectation because we are listed in the market in December 2009 and our first financial result after the listing was in 2010. That was the only year we made a loss
“In 2011 and 2012, we made profit. After 2010, it has been over a 100 percent growth because we moved from a negative margin position to zero position and then, to a profit position. So, we have done pretty well looking at where we are coming from.”
“For every business, especially every manufacturing company, you have to experience such decline sometimes. You have to grow from zero and get to break even. We started our business in 2009. We are into manufacturing. We are not traders that buy and sell. Rather, we deploy equipment and resources and it will take a little while to grow the demand to the point where you break even and that is the level we attained in 2010.
“The challenges for our company are the same with all SME companies in Nigeria and that is the problem of accessing finance. It has been a challenge and that is why we want to raise capital. We are sure that through our listing, we will be able to overcome the hurdles,” Ekpe said.
Earlier in his address, the Chief Executive Officer, NSE, Mr. Oscar Onyema, extolled the fighting spirit of the company, pointing out that it was one of the most compliant SMEs listed on the exchange.