Economy
Dunlop Seeks Core Investor to Produce Tyres in Nigeria
By Modupe Gbadeyanka
Managing Director of a leading marketer of automotive tyres, Dunlop Nigeria Tyre & Rubber Plc, Mr Mohammed Jimoh Yinusa, has disclosed that the company was looking for at least a major investor to enable it return to the manufacture of tyres in Nigeria.
In a notice to the Nigerian Stock Exchange (NSE) this week, the firm, which shut down its local production in 2008 due to a government policy, said it intends to return in full force to take its place in the market.
To achieve this goal, Dunlop is marketing its 10-year strategic business plan it developed with the hope of getting a potential investor, who will key into the vision of the company.
“We have developed a 10-year strategic business plan for a return to local tyre manufacture, which is currently being marketed to enable us secure a core lead investor for the project as the company currently does not have a single investor with up to 5 percent shareholding to provide the required leadership, after which we would jointly approach our technical partners.
“We are already in serious discussions with a state government that is setting up an Industrial Park with provision for an automobile cluster and a tyre manufacturing plant, among other possible options,” Mr Yinusa stated.
In 2006, the administration of President Olusegun Obasanjo reduced the import tariff on tyres to 10 percent from 40 percent.
This significantly affected local manufacturers of the product, leading to the exit of Dunlop and Michelin in 2008 and 2006 respectively.
The two leading local makers of tyres could not cope with the huge infrastructural deficiency, especially electric power and Dunlop, which had been operating in the country since 1963, had to go, but continued dialogue with the various successive governments on the need to raise the tariff on imported tyres to encourage local production.
Prior to the 2006 change in policy, Dunlop had just completed a major $50 million expansion into the truck tyre segment a year earlier in 2005 and when it became obvious that the policy reversal was not forthcoming, the firm had to in 2012 take the interim strategic decision to realise all its manufacturing assets to enable it to repay its indebtedness to financial institutions of over N8 billion, which was achieved by the end of 2014.
According to Mr Yinusa, the believe in the future of local tyre manufacture in view of the huge market in the West and Central African sub Regions, with no single tyre plant currently, made the company strategically retained its investment in natural rubber plantations through its 60 percent shareholding in its subsidiary company, Pamol Nigeria Limited, the key minority shareholders being Cross River State government with 21 percent and Delta State government with 15 percent.
Natural rubber constitutes about 50 percent of tyre raw materials, with Carbon Black at about 25 percent, both of which are significantly locally available.
The company’s CEO said, “We have now recorded significant results with the federal government, through the National Automotive Design and Development Council, with the conclusion of a new Automotive Policy which has taken into consideration the key policy negatives of the 2006 reversals.
“This new policy is in the process of being forwarded to the National Assembly for legislation in order to strengthen the future policy stability in this regard.”
“We wish to use this medium to appreciate the understanding exhibited by our shareholders and other stakeholders during this very difficult phase in the history of our company, while we continue our efforts to return our company to profitable operations in order to continue our over 57 years corporate journey,” Mr Yinusa said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
