By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Conglomerate giant, Nosak Group has reported an investment of N5.0billion in its Distillery Plant, Nosak Distilleries Limited; as the Group eyes listing on the Nigerian Stock Exchange (NSE).
Toni Ogunbor, Chairman/Group Managing Director (GMD) of the Group Thursday made this affirmation to newsmen at a media parley/facility tour of the Group’s Distillery Plant in Lagos Nigeria. “The total investment to date, for this plant is over N5.0 billion†he said.
Ogunbor said that to maintain the Company’s leadership position in the industry, its third plant is set for commissioning by the end of October 2011. “This will bring the daily combined production capacity to 540,000 litres, this capacity in addition to the capacity of other current local producers will be enough to meet the Local Market demand and excess for export Market†the Chairman said.
According to him, the Nosak Distilleries commenced operation in July 2002 and specialised in the production of Ethanol, with a daily production capacity of 100,000 litres; while it increased this to 250,000 litres per day; following the commissioning of a second plant in October 2007.
He affirmed that the increase in the Plant capacity will generate additional 250 jobs.
Listing the Nosak Group on the Nigerian Stock Exchange (NSE), Ogunbor confirmed that there are plans to do so; but said that it will be done at the appropriate time.
“Be assured that it is the ambition of this Group to eventually be in the Capital Market, if we are going to the Capital Market, we should be able to have a track record that will attract potential investors, they would want to see our financing structure and historical trend. For the kind of challenges that we are facing, we think, we still need to work through our plan to come out with something that would be impressive to any prospective investor; but be rest assured the Stock Exchange is where we want to be†he said.
According to the Chairman/GMD of the Nosak Group, its Managers are highly skilled and hard working professionals that know the benefit of going to the Capital Market; “and without being told, we know that is where we want to be, there are pioneer industries in this environment owned by indigenous people that have succeeded in doing so and that is where we want to go†Ogunbor affirmed.
On the ownership of Nosak Distilleries, he said it is joint venture between the Group and Tradhol International SA of Spain; with Nosak Group owning 90 percent (90%) and Tradhol 10% holding.
“We at Nosak Group own 90% and the foreign people 10%, we have the controlling stake†he said.
The Chairman/GMD of Nosak group further highlighted some of the challenges faced in the operations of the Company; these include infrastructure such as good roads, constant power and water supply.
“These three items as regards our facility in this location are provided by us; no Government is providing any of these things for us. If I tell you what it cost us to build those power plants, you will be amazed, like I have always told people, such an amount can start another business; if our public power supply were steady and efficient†he said.
Another challenge he mentioned is the high cost of funds, “when you are growing an industry, and the Bank is giving you funds with up to 15% interest, you can’t go too far. And that is why quite a number of Manufacturers who use such money run into problem and eventually go bankrupt. It is by the Grace of God we are just here. We have developed a relationship with our Bankers and we are able to carry them along; not because we are not facing these challenges of high cost†the Chairman affirmed.
Ogunbor also said Government policies and regulations are part of the challenges militating against the operations of the Nosak Group, “going into export, you would have thought that the duty drawback we are suppose to get for doing that will come instantly; but take it from me, sometimes it takes two to three years before you get it back; this destroys the interest to go into export†he said.
