By Chioma Obinna
The Board of Directors of Vital Products Plc has declared  a total dividend of N36.45 million , translating to 2 kobo per share to its shareholders for the year ended 31 March, 2010.

The company recorded a turnover of N4.173 billion when compared with N2.998 billion in 2009 which shows an increase of N1.175 billion (39.19 per cent) during the year under review.  It also recorded a profit before taxation of N489, 725 and profit after tax of N462,725.

Speaking at its Annual General Meeting (AGM) in Lagos last week,  Chairman of Vital Products, Alhaji Bashir Aminu- Iya zazzau said, “ despite the harsh operating environment occasioned by global financial meltdown which reduced purchasing power in the economy, the company was able to operate profitably and retain its market share by focusing on efficiency and improved customer satisfaction.

Amuni- Iya Zazzau who noted that although manufacturing sector in Nigeria experienced appreciable growth in the financial year under consideration, identified the dwindled power supply as a major challenge to the sector.
His words, “Manufacturers virtually depend on generator as source of power, currently accounting for major cost of production. Furthermore, the sector has been operating in generally sub optional environment over the years, confronted by a myriad of challenges.

The challenges are now worsened by the global economic meltdown which is beginning to threaten its very existence as the industrial sector appears to be one of the biggest victims.”

He regretted that the current trend in doing business in Nigeria has forced manufacturers to invest in  infrastructural facilities to run their businesses thereby reducing their profitability and competitiveness.

Other mitigating factors, he identified include; smuggling, excise duty, port congestion, high interest rates and inconsistent investment policies adding that these factors have made the Nigerian firms uncompetitive in the global market.

“In spite our challenges, our business remains resilient with good margins and impressive cash flows which will continue to support our capacity to return value to our share holders.”
He announced that the company has successfully applied for and granted pioneer status by the federal republic of Nigeria from March 2010 for three years, adding that within the period the shareholders will not pay tax on dividend nor bonus.

He further noted that before approval was made to pay the dividend, the board members  were mindful of the fact that the escalating cost of funds and current liquidity squeeze in the banking sector and carefully balance the delicate need to retain cash in the business  for growth in the midst of the current cash crunch with that of adequately compensating shareholders.

Speaking, the Chairman of Nigeria Professional Share Holders Association, Mr. Godwin Anono stressed the need for the company to look inward for integration, adding that the raw materials could be source locally with a view to reducing cost of production.

While commending the company for increasing its staff strength, he encouraged the company to always consider the country’s labour market which he said, has left young Nigerian graduates idle.

He further advised that the management of the company should be prudent in their spending in order not to run down the company.

Another Share holder, Engr. Bode Oke with Quality Environmental and Operational Health & Safety Consultant from Top three Concept Nigeria Limited, Lagos stressed the need for exportation of vital; products to the outside world with a view to expanding its capital base. He advised the company to invest in training adding that when staff are trained they perform better.