Economy
BUA Group Vows to Crash Prices Flour, Sugar, Others
Adedapo Adesanya
The management of BUA Group has promised to crash prices of major food items it produces like sugar, flour, pastas and many others. Since 2016, when Nigeria slipped into recession, the purchasing power of Nigerians has remained low.
Though inflation rate in the country has been on a steady decline, prices of food items have continued to rise and last month, the Nigerian government closed its borders to tackle smuggling of food items into the nation.
This action by government has caused prices of foodstuff to skyrocket at the market and at the moment, the price of a 50kg bag of rice goes for N24,000 to N26,000. Before the border closure, it was selling for N14,000 to N16,000.
What Would Support the Crashing of Prices
General Manager of BUA Ports and Terminals, Mr Mohammed Lile, speaking ahead of the commissioning of the company’s foods manufacturing complex in Port Harcourt, Rivers State, Nigeria this month, told CNBC Africa that efforts would be made to bring down prices of its products.
Mr Lile explained that the huge factory in Port Harcourt was built in line with the federal government of Nigeria’s policy on self sufficiency, stating that the location of the plant gave it a good advantage to bring down the prices of products that would be produced in the complex.
He said the railway lines would reduce the cost of transportation which would make it easy to access parts of the country, adding that the sea was also available for ships to berth with raw materials that would processed at the complex.
He then noted that the use of gas would supplement the lack of power that faced production in the country which had been powered by its partners, Oando.
Mr Lile, in the interview with CNBC Africa and monitored by Business Post, noted that the $400 million project which started over five years ago comprises three factories; a sugar refinery; a flour (pasta) mill; and a power plant.
Sugar Refinery
Speaking on the sugar refinery which has a 720,000 metric tonnes capacity per annum, Mr Lile said, “This sugar refinery has a storage dome of 60,000 storage capacity for raw sugar.”
As for the power plant, Mr Lile disclosed that the plant had three sources that generated 24 megawatts of power.
“We have the turbine, which is 10 megawatts, we have the gas generators which is 12 megawatts, and then we have the diesel generator which is 2 megawatts,” he said.
Explaining how the factories would work together, Mr Lile noted that the imported raw materials, sugar and flour will be stored in the storage dome and processed in the plant.
“We import raw sugar which goes into the dome, it is processed, packaged, and then into the market.
Pasta Production
“We import raw wheat which goes into the silos, which has a capacity of about 32,000 metric tonnes, processed into flour and then to pasta. We also have the Semolina line,” Mr Lile said.
He also noted that the complex has 5 pasta lines.
Mr Lile said that the group had keyed into the Federal Government’s backward integration programme to ensure self sufficiency.
“We have acquired land in Lafiaji, Kwara state and Bassa, in Kogi state. The sugar plantation is already ongoing, generating employment which is also going to give us the raw materials which is going to complement whatever we are importing from Brazil,” the BUA Group top shot said.
He said this was an identical step it took when it started cement production when it went from just packaging to full production with the establishment of its plant in Edo state.
He added, “We have also expanded the Sokoto plants to 2 million tonnes per annum.”
Mr Lile, however, expressed that the major challenge faced by the company is with the Nigerian Port Authority following the decommissioning of the Terminal B Jetty in the Port Harcourt, Rivers State, Port complex, which is operated by the entity.
He noted that the issue was bringing about a loss of job opportunities for many Nigerians.
By Adedapo Adesanya
There was a 0.15 per cent appreciation at NASD Over-the-Counter (OTC) Securities Exchange on Monday March 17, with the NASD Unlisted Security Index (NSI) increasing by 4.90 points to close at 3,368.64 points, in contrast to last Friday’s 3,363.74 points and the market capitalisation of the bourse rose by N2.83 billion to settle at N1.945 trillion compared with the preceding trading day’s N1.942 trillion.
Okitipupa Plc gained N7.66 during the session to close at N307.66 per unit compared with the preceding session’s N300.00 per unit, FrieslandCampina Wamco Nigeria Plc expanded by 78 Kobo to settle at N39.01 per share versus last Friday’s price of N38.23 per share, and Geo Fluids Plc grew by 6 Kobo to trade at N2.90 per unit, in contrast to the previous trading day’s N2.84 per unit.
On the flip side, Afriland Properties Plc lost N2.01 to close at N21.19 per share compared with its previous rate of N23.20 per share.
Yesterday, the volume of securities traded at the bourse went down by 55.8 per cent to 288,383 units from the 652,237 units recorded last Friday, the value of securities traded by investor depreciated by 45.3per cent to N18.2 million from the N33.1 million quoted at the preceding session, and the number of deals executed at the first session of the week shrank by 27 per cent to 27 deals from 37 deals.
When the market closed for the session, Impresit Bakolori Plc remained the most active stock by value (year-to-date) with a turnover of 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 13.0 million units valued at N505.1 million, and Afriland Properties Plc with 17.4 million units sold for N357.0 million.
Also, Impresit Bakolori Plc remained as the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 69.9 million units sold for N23.7 million, and Afriland Properties Plc with 17.4 million units valued at N357.0 million.
By Adedapo Adesanya
The Naira depreciated against the United States currency at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday by N9.61 or 0.63 per cent to settle at N1,531.98/$1, in contrast to last Friday’s value of N1,522.37/$1.
Similarly, the Nigerian currency weakened against the Pound Sterling during the trading session by N20.41 to quote at N1,984.61/£1 compared with the previous trading day’s rate of N1,964.20/£1 and against the Euro, it tumbled by N14.68 to sell for N1,668.46/€1 versus the preceding session’s value of N1,653.78/€1.
The depreciation trend continued after the exchange rate had appreciated just once over the last week as supply factors and the Dollar strengthening across the global market continues to impact other local currencies.
Nigeria’s inflation cooled to 23.18 per cent in February, a month after the National Bureau of Statistics (NBS) rebased its Consumer Price Index (CPI) to reflect changes in consumption patterns. A month earlier, the inflation was 24.48 per cent.
However, the the domestic currency appreciated against the US Dollar in the official market yesterday by N5 to quote at N1,585/$1 compared with the previous session’s N1,590/$1.
In the cryptocurrency market, most of the tokens fell as investors expect the US Federal Reserve to keep interest rates steady this week, with analysts saying policymakers might pause or stop the central bank’s balance sheet runoff.
There are also trade tensions and concerns around a slowdown in the US economy at a time when it is increasingly uncertain how much more accommodation the US central bank can offer.
Solana (SOL) slumped by 2.8 per cent to trade at $125.04, Litecoin (LTC) fell by 2.7 per cent to $89.70, Dogecoin (DOGE) lost 2.5 per cent to settle at $0.1673, Ripple (XRP) dropped 2.2 per cent to end at $2.28, Cardano (ADA) slid by 1.5 per cent to $0.7072, Bitcoin (BTC) crashed by 0.4 per cent to $83,103.91, and and the US Dollar Tether (USDT) went down by 0.03 per cent to $0.9998.
Conversely, Binance Coin (BNB) appreciated by 0.8 per cent to $634.55, and Ethereum (ETH) added 0.5 per cent to close at $1,907.25, while the US Dollar Coin (USDC) was flat at $1.00.
By Adedapo Adesanya
Crude oil rose on Monday after the United States vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping, which is affecting prices.
As a result, Brent futures went up by 49 cents or 0.7 per cent to $71.07 per barrel and the US West Texas Intermediate (WTI) crude futures gained 40 cents or 0.6 per cent to settle at $67.58 a barrel.
The US carried out airstrikes that reportedly killed at least 53 people.
This is the biggest US military operation in the Middle East since President Donald Trump took office in January.
According to Reuters, the Red Sea port city of Hodeidah and the Al Jawf governorate north of the capital Sanaa were targeted on Monday.
Mr Trump said on Monday he would hold Iran responsible for any attacks carried out by the Houthi group that it backs in Yemen.
Meanwhile, the Houthi group said it would target US ships in the Red Sea as long as the country continues its attacks on Yemen.
Also, Chinese economic data buoyed hopes for higher demand.
Retail sales growth quickened in the world’s largest oil importer in January-February, indicating positive signs to boost domestic consumption.
However, unemployment rose and factory output eased.
Support also came as the US Dollar eased against a basket of currencies as investors worried about the economic fallout from President Trump’s protectionist trade policies.
A weaker Dollar makes oil less expensive for overseas buyers, boosting demand.
On the supply front, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) plan to raise oil output from April has also pressured prices.
However, market analysts noted that the prospect of tighter US sanctions against Iran more than offsets the gradual OPEC+ production increase.
The market will also looking forward to and to the Russia-Ukraine war as President Trump said he would speak to Russian President Vladimir Putin on Tuesday about ending the Ukraine war.
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