The Nation Newspaper

Category: Business

  • Cadbury Nigeria may resume dividend payment

    Cadbury Nigeria may resume dividend payment with the 2012 audited report and accounts as the food and beverages company consolidated its recovery.

    Market analysts indicated that Cadbury Nigeria might make its first cash payouts in seven years with the year ending December 31, 2012, citing the company’s positive reserves and improving profitability.

    Third quarter report for the period ended September 30, 2012 showed net profit of N2.08 billion as against N1.56 billion recorded in comparable period of 2011. Profit before tax improved from N2.18 billion to N2.88 billion. Turnover slipped from N24.67 billion to N24.08 billion.

    The report indicated earnings per share of 67 kobo in third quarter 2012, 17 kobo increase on 50 kobo recorded in comparable period of 2011.

    At the last annual general meeting, shareholders of the company were persuaded to forgo dividends and support the board’s decision to plough back net profit after tax of about N4 billion recorded in 2011 to sustain the company’s renewed growth momentum.

    Market analysts said the earnings outlook of the company indicated strong possibility of cash payouts to appreciate the supports of shareholders.

    Chairman, Cadbury Nigeria Plc, Mr Atedo Peterside, had explained that the board decided to retain the 2011 net earnings to provide financial supports to its aggressive reinvestment and capacity enhancement programme.

    Audited report and accounts of Cadbury Nigeria for the year ended December 31, 2011 showed that net profit rose by 217 per cent from N1.17 billion in 2010 to N3.70 billion in 2011. Profit before tax grew from N1.95 billion to N5.08 billion. Turnover, stood at N34.11 billion in 2011 as against N29.17 billion in 2010.

    Atedo said the Cadbury Nigeria’s continuing investment programme was a reflection of the company’s commitment to the long-term viability of the Nigerian economy, adding that the company is being positioned to take advantage of the emerging opportunities in West African markets to grow its business.

    “The company has performed credibly in the last 12 months and is resolved to continue on the current momentum of collective efforts in 2012. Our commitment to shareholder value remains the governing objective, driven by a focused portfolio of strong brands, a revamped route to market structure and a passionate innovative workforce,” Atedo assured.

     

  • ‘Shell’s, Eni’s oil deal may violate UK laws’

    ‘Shell’s, Eni’s oil deal may violate UK laws’

    Royal Dutch Shell and Eni could “fall foul of anti-corruption legislation” in Britain over a $1.1 billion Nigerian offshore oil block the companies bought last year, campaign group’s Global Witness, said on Monday.

    Block OPL 245, which holds an estimated 9 billion barrels of oil, had been owned by former Nigerian oil minister Dan Etete’s company Malabu Oil and Gas. It was later awarded to Shell, starting a decade-long legal dispute that ended last year.

    Shell and Eni according to Reuters, have repeatedly said they paid the Nigerian government last year for the oil block, which Eni operates, and that they never dealt with Malabu.

    Etete originally acquired the asset in a deal conducted while he was Oil Minister under Sani Abacha’s regim. He was convicted for money laundering in France in 2007.

    Local newspapers quoted Nigeria’s Attorney General Mohammed Adoke in May as saying that Shell and Italian company Eni agreed to pay Malabu the money for the block, with the government as an intermediary.

  • Arik, Aero, others slash fares

    Arik, Aero, others slash fares

    Domestic airline operators have reduced their fares, as part of measures to woo passengers.

    Some airline officials told the News Agency of Nigeria (NAN) that the move was to encourage travellers who could not afford the high fares.

    Arik Air, which sold its one-way ticket last week for between N30,000 and N40,000 to any destination in the country from Abuja, has reduced the fare to between N30,00 and N35,000 for economy class and N45,000 for business class.

    Also, Aero tickets, which were sold for N28,000 economy and N50,000 business class, have dropped to N21,400 and N49,000 respectively, while IRS charges between N22,000 and N25,000 for economy and N50,000 for business flyers.

    Med-View, a new airline, which started operation last week, charges between N15,000 and N19,000 for economy ticket and N49,000 on business class to Lagos.

    Aero Business Development Manager, Mark Snoxell said the airline reduced its fare to gain more business opportunities.

    He said the move would also help the airline to mitigate losses occasioned by flying with empty seats.

    An official of Arik Air, who pleaded anonymity, said two of its aircraft that were faulty on Friday had been rectified and certified by the Nigerian Civil Aviation Authority (NCAA) to fly.

  • Challenges before new owners of PHCN

    Challenges before new owners of PHCN

    A new era beckons in the power sector as new companies prepare to take over the electricity distribution companies being privatised by the Federal Government. For watchers, the issues facing the power sector are complex, dynamic, and frequently inter-related. DANIEL ESSIET looks at the challenges before the new operators

    The move to restructure the electricity distribution market and make it more competitive have led to emergence of new players in the field. Consequently, the sector will be moving into an era that will be marked by rapid technology change targeted at improving service delivery.

    Speaking with The Nation, the President, Nigerian Association of Energy Economists (NAEE), Prof Adeola Adenikinju, said the outlook for the supply of electricity has not been positive. So, he sees privatisation as a big step forward to improve power sector’s performance. He said the reforms have provided opportunities, which includes better ways to serve customers, greater customer satisfaction, improved reliability and new revenue streams.

    As new operators takeover, Nigerians expect sufficient supply of power to meet demand for years to come. Nevertheless, Adenikinju said sustaining and enhancing the adequacy of the power supply requires attention to an array of factors such as natural gas and aging infrastructure. With various components of the power system requiring upgrade or replacement, he said efforts will have to be made to address this pressing concern. Much of the power system infrastructure problems are legacy issues and the strategies for addressing aging infrastructure are aimed at supporting current and future needs.

    Adenikinju said the transition expected in the electricity market in the coming years presents a massive challenge to all parties and stakeholders involved in it. Critical challenges, he said would arise from specific issues that affect the regulation of electricity markets from a regulated to liberalised sectors. There are concerns such as security of power supply as well as boosting transmission corridors to provide adequate solutions.

    According to him, tackling these challenges, need to be handled in the most efficient manner. He noted that the transmission system is aging and many facilities will require replacement. In most areas, older, higher cost plants are used to produce higher levels of output. The maintenance costs and lost time for maintenance of older plants are also higher. Consequently, the output of electricity in the short run is accompanied by rising marginal costs. He noted that the nation will need to make increasingly larger sacrifices to radically restructure its electricity market in a manner consistent with world best practices.

    While watchers expect the private operators to play a significant role in shaping the electric power industry, the concerns are that the government needs to upgrade and expand high-voltage transmission facilities, protect and enhance environmental quality and improve energy efficiency. The cumulative effect of these initiatives has the potential to impact power system reliability as well as electricity market dynamics. According to him, a modernized transmission system will make better use of statewide generating resources and enhance access to power resources.

    Adenikinju said that the development of new demand response resources and addition of generation and expansion of transmission will contribute to a more reliable power system.

    For watchers, the issues facing the electric system are complex, dynamic, and frequently inter-related. Nonetheless, the production of electricity from natural gas has grown dramatically. Power plants fueled by natural gas are vital elements of the electric system and their roles are expected to grow.

    On a cautionary note, as dependence on natural gas for electric generation increases, the impact of natural gas supply on electric system reliability and power costs will also grow. For instance, disruptions in natural gas supply can affect the ability of gas-fueled generation to provide power, which could impact electric system reliability. While experts foresee a need for new resources to replace retiring units, project financing remains a hurdle for generation projects. The outlook for return on investment is also unclear.

    Adenikinju urged the government and stakeholders to commit resources to help ensure a bright energy future for the nation.

     

    Congestion challenges

    Operators need to address transmission congestion, including new or upgraded transmission, additional generation, or demand-side measures. Transmission congestion results from physical limits on how much power high-voltage lines can reliably carry.

    Solutions to congestion may include building or upgrading existing transmission, building additional power supply resources in close proximity to an area needing supplies, or reducing the demand for power in the areas downstream from congested lines.

     

    Distribution challenges

    While interconnected, the power grids serving various regions of the country don’t reflect differences in geography, climate, reliability requirements, and available power resources. Where the various regions interface, the differences create seams in the overall fabric of the grid that can lead to market inefficiencies and inhibit efficient coordination of grid operations.

     

    Customers

    They need to allow electricity consumers, suppliers, and service providers to participate in all types of price-based demand response programmes. What Customers want is value-added energy services such as consumption information, consumption controls (load shifting), demand response, higher reliability, and energy bundles).

    The Director-General the Bureau of Public Enterprises (BPE), Ms. Bolanle Onagoruwa, once noted that the objectives of the privatization of the power distribution companies include improving efficiency by increasing collections, reducing technical/non-technical losses, reducing costs as well as increasing access to electricity. Others include improving infrastructure through private sector investment, ensuring fair tariffs to all end-users, increasing commercial viability of the power sector, and improving customer service.

     

    Renewable energy sources

    Overall, restructuring in the electric power industry will stimulate demand for natural gas and that rising demand will lead to higher wellhead prices as the discovery process progresses from larger and more profitable fields to smaller, less economical ones. The restructuring will have a significant impact on crude oil production because petroleum-based generation is a big share of overall electricity generation. Unless required by the Federal Government, the restructured electricity market is not projected to stimulate renewable energy technologies. If policies require increased use of renewable energy, average electricity prices will increase slightly. Biomass, wind, and geothermal would be the most likely technology choices for expanded use of renewable energy.

  •  Akpabio unveils infrastructural projects

    Akwa Ibom State Governor, Chief Godswill Obot  Akpabio, has changed the skyline of his state  by the number of projects he has delivered since the inception of his administration.

    Speaking at the unveiling of the projects by President Goodluck Jonathan, the governor in a statement signed by his Information Commissioner, Mr Aniekan Umanah, said the latest project is  the new  Governor’s Office, which was  conceived to meet the demands of an ever-changing world.

    ”It is not only ICT compliant; it has all the facilities needed for e governance and contemporary governance. It replaces a building we met, at the inception of this administration, which lacked space for visitors and facilities for the administrative controls  needed in today’s world,” he said.

    On the completion date,  he said though they estimated  18 months but the building was finished in just eight months. According to him, “this is a proof that we are running Government at the speed of light, because we know that time waits for no one’.

    On the pipeline is the  Akwa Ibom State Stadium, which  will be a 30,000 seater stadium with a banquet hall, proximate conveniences for all spectators, restaurants on each floor including other amenities. It is planned to meet global standard in stadium architecture.

    On why his administration is investing in sports, he said the global sports industry is four times larger than the automobile manufac-turing industry, and seven times larger than the film industry.

    According to him, despite a global economic slowdown, a study by Price Waterhouse Coopers predicts a revenue growth rate of 3.7 per cent ($145.3 billion) for the sports industry by 2015 and the state intends to be part of this action.

    The governor  recalled  that the state government  took up the construction of the Ikot Ekpene-Aba Federal Road and the Ikot Ekpene – Itu-Odukpani-Calabar Federal Road  to maximise the Deep Sea Port and the Ibom International Airport, which has facilities for cargo flights.

    Responding President Goodluck Jonathan,  who was the special guest on the occasion, asked other governors to learn from Akpabio  in his infrastructure devlopment  in the state. He said: “In coming to inauguration of the new Governor’s Office, Uyo, and laying the foundation stone of the 30,000-seater Akwa Ibom State Stadium, we celebrate the exemplary leadership and patriotism of Governor Godswill Obot Akpabio of Akwa Ibom State. He has shown us what we can achieve, when we seek pragmatic solutions to our national problems.”

    He also said:  I am not here because this edifice is beautiful; I am here because the principle of democratic accountability is thriving here in Akwa Ibom State. It was this principle, which, apparently, led the Akwa Ibom State Government to partner with the Federal Government and to tar some of the Federal roads in its territory for the benefit of Nigerians and to save the lives of Nigerians. What is morally right, cannot be politically wrong.”

    He confirmed Federal Govern-ment’s readiness to partner with the state  as co-investors in the Akwa Ibom State funded Maintenance, Repair and Overhaul (MRO) facility at the Ibom International Airport, and to turn it into a National Hanger.

    The character of the stadium,  according to the statement, is created by its unique physical appearance that will be enclosed by a white triangular shaped out skin that wraps around the entire stands area made of acrylic glass.

    The main criteria of the stadium concept he said are classic multi-purpose stadium layout with running tracks, two-tiered seating arrangement excellent viewing conditions, arena with football pitch and eight-lane 400-metre standard track including complete athletic facilities in the segment of the field and access system of the tiers with “Vomitories”, among others.

    The Information Commissioner also revealed that the governor’s office has, among others, the governor’s conference hall, courtesy call room lounge, multimedia studio Executive Council chambers with video conferencing facilities, among others.

  • NHRC summons NAGAFF over invasion

    The National Association of Government Approved Freight Forwarders (NAGAFF) has appeared before the National Human Rights Commission (NHRC) over an allegation that some military personnel invaded its office in Apapa, Lagos.

    Last week, investigations revealed that some NAGAFF members appeared before the NHRC to give information about the alleged invasion of it’s national headquarters at Apapa, Lagos.

    At the commission’s office, NAGAFF, sources said, alleged that some soldiers invaded its headquarters on the orders of a Deputy Comptroller of Customs, who was then in charge of the Customs Intelligence Unit (CIU) at the Tin Can Island Port.

    Sources at the Commission said NAGAFF through its solicitor, Larry Okonkwo, in a letter entitled: “Invasion of NAGAFF Headquarters Lagos by 13 Unknown Soldiers at Instance of a Deputy Comptroller of Customs, Customs Intelligence Unit (CIU) Tincan Island Port, Lagos and Threat of Life of Dr. Boniface and other Officers of NAGAFF,” had petitioned the senior Customs officer over her alleged role in the invasion and subsequent alleged threats to the lives of Aniebonam and other NAGAFF members.

    The Commission said in the invitation letter to NAGAFF, a copy of which was sighted by The Nation, that the request to appear of before the Commission was based on the human rights issue, raised by the NAGAFF’s lawyer.

  • Clarke frets over Petroleum Industry Bill

    Elder statesman Chief Edwin Clarke has said certain issues, which the newly revised Petroleum Industry Bill (PIB) before the National Assembly fails to address may end up undermining and threatening the existence of the Niger Delta if not revisited.

    The former Information commissioner expressed this concern while calling for additional provision to be included in the bill to take care of these issues.

    Delivering a paper entitled: The PIB and the oil producing areas equation, at an Upstream and Downstream Oil and Gas expo in Abuja, Clarke said some of these issues centred on transparency, the environment and economic empowerment of the people of Niger Delta.

    On transparency and accountability in the oil and gas industry, Clarke said they are provided for in the bill, particularly on tendering and licensing for oil blocks still fall short of what is required.

    He said: ”The process of licensing and tendering in the oil industry is still not transparent enough even with the new PIB. I would have wanted the process to be made more open so that the owners of the oil blocks are made public. Such transparency will curb the corruption in the industry as well as increase the revenues accruable to the Federal Government. We need to have a competitive and open licensing and tender process for all the oil blocks and marginal fields as well as in the associated processes for granting licenses for crude oil lifting and other downstream activities. This I think would ensure better returns to the government.”

    On protection of the environment, Clarke said what the new bill makes provision for is still a far cry to what is required for the mitigation of the level of degradation done to the environment.

    Clarke said: “The damage done to the environment via oil and gas operations by the oil companies has been quite enormous and as a result something ought to be done either to reduce or stop the damage .The current issues of environment need to be addressed by putting in place measures to stop the activities of these oil companies that are destroying our environment and ecology. There is far less than the provision in the bill can offer. But an additional provision in the new bill would ensure that these measures are implemented in such a way that there are significant consequences for any organisation that continue to violate the law. The clean up and remediation activities must start in earnest while gas flaring and persistent repeated pollution must be made to stop.”

    On empowerment of the people of the region, he noted that the new bill still leaves much to be desired, particularly on engaging Niger Deltans as stakeholders in the oil industry.

    “There are still issues with the provision of the new PIB especially as it concerns the economic empowerment of the Niger Deltans. It would be good we have a quota system that measures the participation of Niger Delta indigenes in the organisations involved in the petroleum sector in the region including the IOCs, NNPC and indigenous oil companies. The new regulatory bodies proposed by this bill should also be subject to similar Niger Delta content requirement.”

     

  • Firm seeks roadmap for local content

    The Managing Director, Lagos Deep Offshore Logistics (LADOL), operators of the Lagos Free Zone behind Tin Can Port, Dr Amy Jadesimi, has challenged the government to chart a definite roadmap for Local Content Law administration in the maritime industry.

    She said this became imperative following the delay in the disbursement of the Cabotage Vessel Finance Fund (CVFF) by the Nigerian Maritime Administration and Safety Agency (NIMASA).

    The LADOL boss, who spoke with The Nation at the Logistics West Africa Conference and exhibition in Lagos, said the call became necessary in view of some challenges faced by local operators.

    She bemoaned the foreign domination of the shipping business in the country and urged the Federal Government to make the fund available to Nigerians.

    The LADOL boss also called on some private sector operators, who still operate as appendages to foreign interests, to have a change of focus. Mrs Jadesimi noted: “We need to see more private sector indigenous operators in the industry being on their own. We need to stop being mere agents. This agency model of classifying ourselves with one or two percentages of large contracts is not sustainable and will not help us.”

    Mrs Jadesimi said with the passage of the local content law, many indigenous operators were coming into the business with a measure of confidence, noting that it is the right way to go.

    She said the impact of free zones to the maritime and oil and gas industry, and how they are facilitating logistical efficiencies, specifically called for a sustained synergy between the Ministry, relevant government agencies and notable private sector operators in taking another look at some of the areas of the law, which constitute significant challenges that still impede the success of the law.

    According to her, one of such areas is the issue of tender process, which, she says, actually works against Nigerian players, in favour of foreign interests.

    “So, they now have to work together with qualified private sector and look at how we can encourage such investors who are seen to be doing something realistic so that they can continue to invest with a measure of confidence,” she added.

    Harping on challenges facing operators in the industry, Jadesimi said from LADOL’s experience, financing was still a huge problem because of bank’s lending rate compared to what obtains elsewhere.

    She, however, berated some of the top players who she accused of festering what ‘zero sum game: I win you lose, and I lose, you lose’ syndrome, which she described as “very damaging and anti-development.”

  • Customs denies attempt to bribe lawmakers

    The Customs Service has denied buying 200 cars for members of the National Assembly to pass the amended Customs and Excise Management Act (CEMA).

    Its Customs National Public Relations Officer, Deputy Comptroller Wale Adeniyi, said the claims by the Managing Director of Maritime Media Limited, Elder Asu Beks, that Customs acquired the cars to influence the lawmakers to free the Service from the control of the Presidency and the Federal Ministry of Finance were not true.

    “It is good and easy for us to address the issue raised by Mr Asu Beks. First, he raised the allegation that Customs bribed the distinguished Senators with 200 cars to pass the CEMA Bill. Well, we find this allegation curious and unfounded and these are allegations that Mr Asu Beks cannot back up with any evidence. This is not a substantive issue, but, for me as a concerned Nigerian and as a Customs officer, the onus of proof lies with MrAsu Beks to tell Nigerians how Customs actually bribed the distinguished Senators with 200 vehicles. “Beks needs to come out with more facts. What type of vehicles are they? What model? Where were the vehicles bought? Were they imported into Nigeria? He needs to let Nigerians know that this is the evidence he has. He cannot just come and make this type of allegation and we allow him to go like that. It is also in the interest of distinguished members of the House, because it is a credibility issue, and throwing this kind of allegation wildly at them like this is not good for our democracy.”

    The Customs image-maker said the attempt to pass the new Customs bill is noble, because the existing CEMA is old and obsolete.

    “The exercise is to bring the law in tandem with the challenges of modern Customs administration. It is obvious that people like Beks, who are condemning this bill, have not read it. It is so obvious. What this bill sought to repeal is the old 1958 Act. There is a new Act, which was enacted in 2004, which is the Customs Excise Consolidated Act 2004 CAP C49. All the powers of Mr President in terms of granting waivers and concession are intact in Section 12 of this particular Act. Section 12 talks, particularly, about the powers to impose, to vary or remove any import duty and to amend the schedule of the tariff.

    “These are powers that are vested in Mr President and these powers are intact. So, Mr Beks and the like have not read the bill. CAP 49 of 2004 is not among the provisions that the new bill seeks to repeal. All the other powers of the Minister; the power to appoint the Board and members of the Board; to chair the Board of the Nigeria Customs Service and all the powers of the Board are all enshrined in the new bill. They are there and the new bill is not taking away any power that was vested in the under the former Act,” Adeniyi stated.

    He told The Nation that Customs might take legal action against Beks to compel him to proof his unfounded allegation.

  • Sugar Master Plan takes off

    Sugar Master Plan takes off

    The Federal Government yesterday kicked off the implementation of the Nigerian Sugar Master Plan.

    The Minister of Trade and Investment, Olusegun Aganga, said the Sugar Master Plan, which was recently approved by the Federal Executive Council, is expected to raise the country’s local sugar production level, thereby making the nation to be self-sufficient. Besides, it will stem the tide of high importation of the commodity. It is also expected to contribute to the production of ethanol/ generation of about 411MW of electricity and at the same time create over 100,000 jobs.

    Aganga disclosed this during the first stakeholders’ forum on the NSMP in Abuja on Monday, where he unveiled the new master plan and its implementation strategy. Stating that NSMP is the product of several consultation with all stakeholders in the sugar industry.

    He said, “We held several consultations with all the stakeholders in the sugar industry. At the end of that consultation, the product was a Sugar Master Plan and then a government policy. Again, after further discussions with stakeholders and relevant ministries, the Sugar Master Plan was approved by the Federal Executive Council. Now, we have a Sugar Master Plan, from sugarcane to sugar production.

    “This is the first time that we have gone through the details of the Sugar Roadmap, policies and incentives that are available and the game plan of where we want to be at the end of the implementation of the plan. As at today, we only produce two per cent of the sugar we need in the country while we import raw sugar.”

    “If you compare this to other West African countries, that two per cent is the lowest. For instance, Benin Republic produces 25.6 per cent of their sugar requirement; Burkina Faso, 47 per cent; Cote d’Ivoire, 54 per cent; Senegal, 48 per cent and Mali, 28 per cent.