By peter egwuatu
Vitafoam Nigeria Plc has disclosed that it proposed merger with Vono Products Plc will result to economies of scale and in turn benefit stakeholders in the long run. Vitafoam Nigeria Plc’s Group Managing Director, Mr. Taiwo Adeniyi, while briefing newsmen in Lagos, expressed optimism that the merger of Vono Products Nigeria Plc with Vitafoam Nogeria Plc would translate into higher earnings and enhanced shareholder value.
Adeniyi who reviewed the current operating environment appealed to the federal government to create enabling environment for manufacturers in view of the effects of high exchange rate of the Naira on importation of raw materials. He explained that the shareholders of both companies overwhelmingly endorsed the merger at the recent Extra Ordinary General Meeting, EGM .
According to him, the shareholders appreciated the potential benefits of the merger such as economies of scale, cost savings and improved operational and administrative efficiencies among others.
Adeniyi noted that the enlarged company would enhance growth in size. In his words “ I can assure you that we at Vitafoam have always been thinking ahead. The issue of merger started about five years ago. Vitafoam is not just about mattresses only. We have many products for human comfort. As you all know, Vono is also a brand.
“If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vitabloom, Vitagreen and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose.
“ We are truly a national company. We have a full fledged factory in Ikeja, Kano, Aba and Jos. We also have factories off shore. We operate at Sierra Leone and Ghana strategically to position the Centre for inflow of Dollar in the long term because these are dollar based business environment. They may not be generating expected profit for now but they have high prospect .The key issue is that Vitafoam as a group has a very bright future and the shareholder value would be greatly enhanced. As a mark of competence. Vitafoam is ISO certified”, Adeniyi said.
Corroborating him, Vitafoam’s Group Executive Director, Corporate Services, Mr. Olatunji Anjorin described the merger as a vertical one as the furniture produced by Vono Products would complement Vitafoam’s foams. Anjorin explained that the consummated merger would put an end to past encumbrances militating against Vono’s growth, bring about more efficient expertise, shared value and improved technology.