MIRA
INFORM REPORT
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Report Date : |
31st
May 2006 |
IDENTIFICATION
DETAILS
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Name : |
CHUKASON
CYCLE INDUSTRY LIMITED |
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Registered Office : |
6
College Crescent Makurdi, Benue State, Nigeria |
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Country : |
Nigeria |
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Date of Incorporation : |
9th
March, 2004 |
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Legal Form : |
Private
Limited Liability Company |
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Line of Business : |
Traders
of motor cycle spare parts of different models. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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Status : |
Moderate
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Payment Behaviour : |
No
Complaints |
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Litigation : |
Clear |
REPORT SUMMARY
Name: Chukason
Cycle Industry Limited
Address: (1) B2/422 Main Market Onitsha,
Nigeria
(2) 8 Haruna Street Onitsha (Main Market)
Tel: 234-1-8033039407
Registered Office: 6 College Crescent
Makurdi, Benue State, Nigeria
Date Incorporated: 9th March, 2004
Managing Director/CEO Mr. Emeka
Legal Form: Private Limited
Liability Company
RC No.: 606287
Authorized Capital: 100,000
Line of Business Selling of Motor Cycles
Spare parts
Product/Service: - Jincheng Spare parts
- Suzuki Spare parts
- Supra Spare parts
- Yamaha Spare parts
- Windy Spare parts
Number of Employees: 10
Sales Turnover: Financial Information
was not provided
Networth: N/A
Financial Condition: N/A
Operating Trend: Steady
Payments: Prompt
Public: Nothing detrimental uncovered
Credit Risk: Average
Credit Limit: Medium credits
possible
BUSINESS RISKS
SUBJECT’S BUSINESS
ENVIRONMENT
Presently, the Nigerian economy is improving because the
Federal Government has put in place a lot of economic reforms. However, the
economy is still characterized with low capacity utilization in the industries,
high inflationary trends, unfavorable interest rate and high employment rate.
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NATURE OF SUBJECT’S
BUSINESS
Chukason Cycle Industry is into sales of
Motor Cycle spare parts of different models that can be found in Nigerian mass
market
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THE COMPANY AND ITS
INDUSTRY
Auto-cyclic industry remains capital
intensive but highly profitable venture. It is dominated by indigenous
companies subject is a player within the industry.
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MANAGING DIRECTOR
& CEO
Mr. Emeka is the Chairman / Managing
Director / CEO and directly in charge of general operations. All major
decisions are taken by him.
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BUSINESS DIRECTION
OF SUBJECT
The Subject envisages to be in the fore-front
as one of the reliable indigenous companies that specializes into sales of auto
motorcycle spare – parts in Nigeria.
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CASH FLOW &
PROFITABILITY
Financial Information was not provided
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MARKETS AND PRODUCTS
The auto motorcycle industry is an expanding
sector with great potentials.
Subject products are in great demand due to
teeming population in Nigeria
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MARKET GEOGRAPHICAL
SPREAD
Subject’s operates locally within the south
east of Nigeria. Its products and charges are very competitive with its
competitors.
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PRODUCT RANGE
Subject specializes in the selling of spare
parts of the following motor cycles
-
Jincheng
spare parts
-
Yamaha
spare parts
-
Windy
spare parts
-
Suzuki
spare parts
-
Supra
spare parts
-
Lifan
spare parts
The spare parts include the following:
Headlight, Foot-rest, Tyre, Carburetor,
Chain, Shock Absorber, Engine Black, Crane Shaft, Top cylinder and Kick.
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PRODUCT LIFE CYCLE
Subject’s product life cycle is long.
However this is dependent on the usage, maintenance level, amongst others.
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THE SUPPLY CHAIN
Subject purchases its product from importers
and sell it to the end users in Nigeria.
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TECHNOLOGY & CHANGE
Subject is gradually adapting to
technological and change in its line of business by buying from importers that
are abreast of latest trend in technology.
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COMPETITIVE
ADVANTAGE
Chukason Cycle Industry Limited has a
strategic relationship with some importers who supply its products at relatively
cheaper prices. This has helped the subjects to establish long term
relationship with its clients in South East of Nigeria.
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COST LEADERSHIP
Subject buys direct from importers. It is
possible to sell at very low prices to recover its Investment. This strategy
enables the subject to dispose of its product quickly and easily with a
reasonable profit margin.
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BREAKTHROUGH PRODUCTS/SERVICES
Subject products are of good quality and
carries equal strength and value.
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MARKET SEGMENTATION & FOCUS
Subject operates in the local market with a
focus on the Eastern part of the country.
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COMPETITIVE FORCES
Major competitive forces include foreign
companies in Nigeria dealing in the same line of business.
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EXISTING COMPETITORS
1.
Sylva
Gold Resources Limited
2.
Bisc
Ventures Ltd
3.
Real
Brothers NIgeria Ltd.
4.
Remmwaco Nigeria Ltd
5.
Manco
International Ltd
6.
Mekus
Investment Ltd
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THREAT OF NEW ENTRANT
There is no threat of a new entrant within
the industry. Since the industry is capable to accommodate newcomers.
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SUPPLIER POWER
There are several suppliers within the
industry. No single supplier can exert undue influence on the market.
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BUYER POWER
The market is characterized by many
customers. No one customer can exert undue influence over the operation and
pricing.
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- Strengths: Indigenous company and
high quality products.
- Weaknesses: Inadequate funds
o
Opportunities: Large population
- Threats: Unfavourable
Government policy.
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SHAREHOLDERS & SHARES HELD % of Shares Held
§
Ikebudu
Chukwuka 50%
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Ikebudu
Chinonso 20%
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Ikebudu
Ikiruka 15%
§
Ikebudu
Christian 15%
Comment: The result of the search we
conducted on the subject at Corporate Affairs Commission, we found Chukason
Technologies Limited not Chukason cycle industry limited.
Moreover, the subject Managing Director told
us that he is Mr. Emeka but we could not ascertained this from the name of
Directors at Corporate Affairs Commission.
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AFFILIATED COMPANY:
Information was not provided.
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INFORMATION
TECHNOLOGY:
Subject’s operations are well computerized.
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PREMISES
B2/422:This is a store in the main market,
it is a rented apartment.
8 Haruna Street- This is a three storey
building painted in blue and red. It is a residential building. However, the
ground floor is used for commercial purposes and subject uses it for poster
address.
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MANAGEMENT
PROFILE:
Names Designation Qualification
1. Mr. Emeka MD/CEO
comment: Information on other line managers
were not provided.
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EMPLOYEES
Ten
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OWNERSHIP STRUCTURE
(a) Shareholding
percentage:
Nigerian - 100%
Foreign - Nil
Government - Nil
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MARKETING REPORT
Pricing policy: Competitive
Turnover/Products (N): N/A
Turnover by Geographical Distribution (N): N/A
Service Plan: N/A
Marketing Research: N/A
Competitive Analysis
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Price: Competitive
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Location: B2/422
Main Market Onitsha
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Distributive network: Onitsha, Awka and Asaba.
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Quality of Services: High
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ECONOMIC
TREND
2006
Foreign Exchange Rate to US$ N145
Interest Rate (Lending) 30%
Comment: Foreign exchange fluctuation affects the operation of most indigenous companies involve in import trade.
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GLOBAL ECONOMIC TREND
Globally trend in auto cycle industry shows an inclination towards merger and acquisition. New direction in the industry tends towards a search for more environmental friendly cycles.
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SUPPORT FACILITIES:
Computers
Cars
Access Road
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BRANCHES:
Information not available.
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SOURCE OF RAW MATERIALS
Subject procures its products from importers
whose import motorcycle parts into Nigerian Mass Market.
FINANCIAL
INFORMATION
Financial information was not provided despite our visits to subject office.
JUDGEMENT ABOUT SUBJECT’S CREDIT
STANDING
CHARACTER
Subject
is fairly new in the industry, besides, it is known for its high quality
product.
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ABILITY
The
memorandum and articles of association empowers subject to enter into financial
contractual obligation.
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MEANS
Information
not available.
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PURPOSE
Information
not available.
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AMOUNT
Information
not available.
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REPAYMENT
Information
not available.
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INSURANCE
Information
not available.
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INTEREST
Subject
will be willing to pay the ruling interest rate.
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COMMISSION
Subject
will pay any agreed commission.
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VITAL
GOVERNMENT CONTACT
Subject does not have any government contact
for now.
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LITIGATION
No legal issue was brought to our notice at
the time of writing this report.
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BANKER
1. Name of Bank: Zenith Bank PLc Onitsha , Anambra State
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EXECUTIVE
LIFESTYLE
Name: Mr.
Emeka O
Address: 8
Haruna Street Onitsha, Main Market Anambra State Nationality: Nigerian
Position in the Company: Managing Director/CEO
Marital Status: Married
Number of Children: N/A
Political Association: N/A
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PROPERTY
OWNED BY PRINCIPAL
Real Estate
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Number: Information
not available.
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Location:
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OTHER FACTORS
GOVERNMENT REGULATIONS
There is no government regulation except in
motor vehicle where government bands the importation of vehicles that has been
used for over ten years from importing into the country.
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LEGAL ISSUE
No legal issue was brought to our notice at
the time of this report
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LABOUR ISSUES
No organized union in the
company. No strike has been recorded.
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INFRASTRUCTURE PROBLEMS
Nigeria’s basic infrastructures are
gradually improving with the advent of the present administration;
Telecommunications; Power Supply; Road Network & Water Supply are being
given attention.
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CORRUPTION ISSUES:
Despite laws enacted to curb
the tide of corruption in Nigeria, the scourge is yet to be totally eradicated.
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TERRORISM:
There is no terrorism in Nigeria. However,
occasionally there are religious and kidnapping of expatriates whose work in
oil companies in Nigeria.
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DEBT MATURITY STRUCTURE:
Information not available.
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LOCAL DIVIDEND PAYOUT REQUIREMENTS:
Subject is a privately owned
company. Payment of dividend is at the discretion of the owners.
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SOCIAL/COMMUNITY RESPONSIBILITY
Subject is currently not involved in any
social and community responsibilities.
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STOCK MARKET SHARE MOVEMENT
Stock
Price: Not
Applicable: Subject is a private company.
Quantity:
Current Price:
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COMMENT
AND RECOMMENDATION
Chukason cycle Industry Limited is a going concern business in Nigeria
but the search we conducted on the subject at Corporate Affairs Commission we
found out that it was Chukason Technologies Limited not Chukason Cycle Industry
Limited.
Moreover, our intelligence source revealed that the Managing Director,
Mr. Emeka was not willing obliged us with necessary information about his line
of business.
Above all, caution must be taken in dealing with the subject.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |