Daniel Essiet
A KEY player in the fertiliser industry, TAK Agro Plc, is raising N15 billion senior secured bonds at the rate of 16.49 per cent annually to finance the transportation of fertiliser and food grains.
Senior Secured Bond means debt security (that is not a loan) that is issued by a limited liability company, partnership or trust and secured by a valid first priority perfected security interest on specified collateral.
The bonds will be due in 2026.
Speaking during the signing ceremony in Lagos, the Managing Director, TAK Logistics Limited (TAKL), a subsidiary of Tak Group, Mr Chuma Henry Maduekwe, said the company engages in the movement of fertiliser raw materials, such as imported phosphate and potash.
It also moves locally sourced urea and limestone from ports and locations to the various fertiliser blending plants under the Presidential Fertiliser Initiative (PFI).
The blended fertiliser, he added, are delivered to the agro-dealers, farm gates and distribution/aggregation centres.
TAKL moves grains/farm produces from aggregation centres to silos and warehouses and helps in the distribution of silos-processed farm produce to food processors, manufacturers or end-users.
Maduekwe said TAKl had transported over 30,000 truck trips of fertiliser which was a huge logistics undertaking and a scenario with very many challenges.
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He said the company currently owns no trucks and has been engaging third party transporters to provide its logistics requirement.
However, the company has suffered from low cycle-time due to the limited availability of trucks and challenges within the transport logistics sector in Nigeria.
For instance, any fertiliser that does not get to the farmer before the planting season is too late for that season.
He explained that the fertiliser will have to be stored till the next planting season and that comes with huge carrying cost and risks.
He explained that truck-hiring cost keeps increasing every month because the transporters know that users such as TAK are at their mercy as there are no alternatives
To foster efficiency in its delivery system, he said TAKL is raising the bonds to make a purchase of 250 trucks to help control a portion of the total transport logistics requirements.
The acquisition of trucks, according to him, would see performance improvements in the coming years, as well as a hedge against over-dependence on third party transporters.
In his remarks, the Chairman, TAK Agro PLC, Mr Thomas Etuh said the company went into agricultural transportation to improve storage and transport infrastructure for foodgrains in Nigeria.
According to him, the company’s silo and warehouse storage have a capacity of more than 250,000 metric tonnes located in major areas of the country.
This enables it to handle thousands of tonnes of food grain from farmers and agro-businesses.
The company’s silo structures, he explained, follows a scientific method of storing grains, which enables bulk preservation of produce for longer periods.
As a major fertiliser blending company with a combined capacity of almost one million tonnes, he said TAK Agro Plc partnered with the Federal Government of Nigeria in driving its Growth Enhancement Support Scheme (GESS) programme.
On the bonds, he said the response has been impressive as it been oversubscribed.
Planet Capital raised the N15 bond on behalf of TAK Agro Plc.
TAK Agro Plc bond issuance is the first agricultural value chain finance in the Nigerian capital market, it was learnt.
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