Livestock Feeds |
Livestock Feeds
Plc, a subsidiary of UAC of Nigeria Plc, has announced that it is
currently investing in its supply chain operation to drive further
growth, and enable it deliver better value to all stakeholders.
The Chairman of the
company, Larry Ettah, while addressing shareholders during the
company's 2016 yearly general meeting held Lagos on Tuesday, said the
company, in a bid to foster efficient supply chain operations, has
installed massive storage facilities across the agro-ecological zones.
According to him,
going by the seasonality of its production raw materials, the storage
facilities would enable the company to take advantage of cheaper market
prices during harvest seasons.
"One of such
projects is the recently commissioned 5,000 metric tonnes Silo
installation in the Aba factory. This facility is expected to position
the company at a vantage position over and above competition to increase
our market share in the Eastern operation through constant product
availability at better prices."
Ettah explained
that the company posted revenue of N11.1billion, representing a 23 per
cent growth over last year's result. However, due to high cost of raw
materials, forex scarcity and other limiting factors, cost of sales,
according to him, witnessed a 25 per cent increase over 2015.
"Despite the
increased costs, operational profit was 24 per cent higher than the
prior year. Profit before and after tax however declined on 2015 due to
the absence of the extraordinary income made from the gains on disposal
of our former Kaduna plant in 2015. Consequently, profit before tax was
N223.9million, a 25 per cent decline on 2015 while profit after tax
declined by about 19 per cent to N152.3million."
The Chairman noted
that "In view of the above results, no recommendation is made for
dividend payment in order to conserve funds for the increasing cost of
operation and to execute our 2017 growth plans."
On the feed milling
industry, the Chairman said 2016 was a challenging year for most
sectors, with the industry in Nigeria having its fair share of the tough
times.
"Chief among the
myriads of challenges faced by the industry during the year was acute
shortage of raw materials especially the energy sources as reflected in
the high cost of maize, and those of its close substitutes and
derivatives. The price of maize for instance, moved up by almost 75 per
cent from 2015 to 2016, while fiber materials prices also skyrocketed.
"The shortage of
these materials was significantly attributed to low farming activities
in the Northern part of the country arising from prevailing insurgency
and increased export activities. The acute shortage of foreign exchange
also led to scarcity and huge increases in the prices of the imported
inputs.
"The high cost of
raw materials fueled high cost of feeds, thereby occasioning frequent
price increases which became unbearable for poultry farmers.
Consequently, many small-scale farms shut down, while big farms managed
to weather the storm by employing various cost saving strategies.
"In the final
analysis, the poultry industry, which is key to the livestock
sub-sector, experienced a serious reduction in bird population. This
unfortunate development also negatively impacted the sales volume of the
feed milling industry," he added.
Also speaking at
the event, an independent shareholder, Nona Awoh,urged the company to
find ways of improving local substitutions by engaging in research
programmes.He also tasked the management of improved performance and
good dividend payout in the current financial year.
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