MIRA
INFORM REPORT
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Report Date : |
14.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
OBAJANA CEMENT PLC |
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Registered Office : |
Ministry of Commerce and Industry, Lokoja, Kogi, Kogi
State |
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Country : |
Nigeria |
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Date of Incorporation : |
4.11.1992 |
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Com. Reg. No.: |
208767 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturer and Distributors of Cement |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
IDENTIFICATION
COMPANY NAME: OBAJANA CEMENT
PLC
REGISTERED NAME: OBAJANA CEMENT PLC
REGISTERED ADDRESS: Ministry of Commerce and Industry, Lokoja, Kogi, Kogi State.
HEAD OFFICE ADDRESS: Marble House (1st Floor) 1, Alfred Rewane Rd. Falomo, Ikoyi, Lagos
FACTORY ADDRESS: Kogi State, Nigeria
TELEPHONE(S): 234-1-7917363-365
FAX: 234-1-2670117
MOBILE: 234-1-7917363-365
E-MAIL: bkashintathv@dangotecement.com
WEBSITE: Nil
POSTAL
ADDRESS: Nil
Subject is into manufacturing and
distribution of cement.
In Nigeria subject is considered to be a large scale concern in this
sector.
Currency: All
monetary values in this report are in Nigerian Naira, the local currency,
except otherwise stated. The exchange rate is N128 to 1 US $.
SUMMARY
NATURE OF PREMISES: Leased, office space at head office
occupying approximately 1,000 square metres.
DATE INCORPORATED: 4th November, 1992
YEAR BEGAN
OPERATION: 1992
LEGAL FORM: Private Limited Company
REGISTRATION NO: RC:
208767
SHARE CAPITAL: N500,
000.00
ALLOTTED SHARE CAPITAL: N500, 000.00
PAID-UP CAPITAL N500, 000.00
AUDITORS: Nil
SOLICITORS: Nil
COMPANY SECRETARY: Nil
STAFF
STRENGHT: 500
OWNERSHIP/SHAREHOLDING
STRUCTURE
Name %Held
Mr. Dan .K Yunusa
Ministry of Commerce and Industry,
Lokoja, Kogi, Kogi State
Mr. A.A Olagboye
Ministry Ministry of Commerce and Industry,
Lokoja, Kogi, Kogi State.
Ignatus A. Amoku
Ministry of Commerce and Industry,
Lokoja, Kogi, Kogi State
SHARE HOLDERS (PREVIOUS)
Nil
DIRECTORS
- Mr. Dan K Yunusa
- Mr. A.A. Olagboye
- Ignatus A. Amoku
- Alhaji Aliko Dangote
- Alhaji Sani Dangote
- Alhaji Abdu Dangote
- Mr. Knut Ulvmoen
- Mr. Olakunle Alake
- Mr. Devakumar V.D. Edwin
- Mr. Uzoma Nwankwo
- Alhaji Aminu Dikko
MANAGEMENT PROFILE
Alhaji Aliko Dangote President/CEO
Alhaji Sani Dangote Group Vice President
Derakuwar Edwin Managing Director
Alhaji Abdu Dangote Group E.D. (Logistics &
Distribution)
Mr. Knut Ulvmoen Group M.D. (Cement Terminals)
Mr. Olakunle Alake Group E.D. (Strategic Planning &
Control)
Mr. Devakumar V.D. Edwin Group E.D. (Industries)
Mr. Uzoma Nwankwo Group E.D. (Corporate Finance)
Alhaji Aminu Dikko Company Secretary / G.M. (Legal)
ASSOCIATE COMPANIES
Benue Cement Co. Plc
Blue Star Shipping Ltd.
Dangote Bonny Allied Industries Ltd.
Dangote Flour Mils Plc.
Dangote Ginnery
Dangote Salt Plc.
Dangote Sugar plc.
Dansa Foods Ltd.
Gata Trading Ltd.
Dangote Agrosacks/A.D. Star
Dangote Bonny Allied Industries Ltd
Dangote Pasta Plc
Greenview Nigeria Ltd
Portland Cement
Sugar Company Ltd.
BRANCH
Factory in Kogi State, Nigeria
PARENT COMPANY
Dangote Group of Companies
BANKERS
Afribank, etb, UBA, First Bank, Access Bank, FCMB, Zenith Bank, Oceanic
Bank, GT Bank, Skye Bank, Fidelity Bank and Intercontinental Bank PLC.
TRADE REFERENCES
Subject has both local and foreign Partners
PAYMENT REFERENCES
Subject has both local and foreign Partners
PRODUCT DESCRIPTION
Cement
PERFORMANCE RANKING
* Quality of Management: GOOD
* Ethics & Integrity: GOOD
* Ownership Structure: GOOD
OPERATIONS
Subject is into manufacturing and distribution of cement.
Subject is located in a central business
area at Marble House (1st Floor) 1, Alfred Rewane Rd. Falomo, Ikoyi
Lagos-Nigeria
TYPES OF CUSTOMERS
General Public, Group of Companies
BACKGROUND
Obajana Cement PLC, owned by Alhaji
Aliku Dangote. This cement factory is currently the biggest in West Africa.
Obajana Factory is located in Kogi State of Nigeria. Obajana is 25 mins drive
from Lokoja, the capital of Kogi State and it’s a hot city. The cement factory
is nearly completed; it will require a lot of money to accomplish it. For
Example, “Obajana Cement PLC’s new production lines 3rd and 4th will gulp about
$1.6 billion”. According to public sources, the company’s Chairman / President
of Dangote Group, Alhaji Aliko Dangote stated that, Obajana cement factory was
conceived by Dangote to meet the entire cement need of the country, and so
reduce the price of cement in Nigerian market. With two production lines, each
of 2.5 million tones a year, the factory alone, it is expected, will be
supplying about 50 per cent of the total cement needed in the country. And when
the productive capacity of Obajana is doubled as planned within one year of
operation, the factory would have a total cement output of 10 million tones a
year, with an additional five million tones per annum produced by Benue Cement
Company, Ibeshe 3 million tones, the group alone will be meeting more than 100
per cent of the cement requirement of the country. However, the just completed
and commissioned lines 1 and 2 of the factory, was built at the cost of $1.2
billion.
Furthermore, it was also said that the fund was syndicated by a
consortium of twelve local banks (Afribank, etb, UBA, First Bank, Access Bank,
FCMB, Zenith Bank, Oceanic Bank, GT Bank, Skye Bank, Fidelity Bank and
Intercontinental Bank PLC, including development finance institutions, (FMO,
IFC, African Merchant Bank, and European Investment Bank), and that a fresh
$1.6 billion is needed to develop the 3rd and 4th lines. It was informed that
the $1.2 billion was syndicated by creditors to construct the first and second
lines of the cement factory, the international finance institutions committed
$330 million, the consortium of local banks provided a facility of $150
million, and the Dangote Group contributed more than $500 million from its
internally generated revenue. “With plan to launch additional 10 million tones,
it would move Nigeria from two and a half million to 23 million tones in
2010. Based on this, it can be guaranteed that between now and 2010; the
price of cement will fall. Cement is current N1, 130 in Nigeria.
The company has promised to reduce the price by June 2008, the price will
crash. They have agreed to invest $1.6 billion more to be able to achieve
this figure, through additional 10 million tones. They believe that undertaking
this project has benefited the whole of the country by breaking new grounds in
many areas of the economy. It will save the economy at least $460 million
annually in cement imports and generate at least 10,000 jobs in the host
community directly from the cement plant and the ancillary industries.
They commissioned the best equipment manufactured in the world to build
the plant and hired the best brains to make the project a reality.” The past
President, Chief Olusegun Obasanjo, who commissioned the production lines 1 and
2, and also laid the foundation ceremony for the 3rd and 4th lines, said “They
are celebrating 4Fs now. They are also celebrating Dangote’s foresight,
forthrightness, fortitude, and fortune.
Based on Dangote’s track in his businesses drive, the past. President
ordered the BPE to sell Federal Government’s shares in Onigbolo cement factory
in Republic of Benin to Dangote. “Dangote would have to sign an MOU with the
government. The MOU will see Dangote stake $3 million dollars in a bank
with a commitment to build a 5,000 MW power plant, another deposit of $20
million with a commitment to build a refinery and an additional $10 million for
a fertilizers plant.
EXPANSION PLAN
To accomplish the third and fourth phase of the Obajana Cement plant.
PRINCIPAL ANTECEDENT
NAME: Alhaji
Aliko Dangote
POSITION: President/CEO
DATE OF BIRTH: April 10th, 1957
PLACE OF BIRTH: Kano State
STATE OF
ORIGIN: Kano State.
NATIONALITY: Nigerian
Brief History of Alhaji Aliko Dangote
Alhaji Aliko Dangote. Born on April 10, 1957 in Kano to Muhammad Dangote
and Hajiya Mariya Sanusi Dantata. He had his primary and secondary education in
Kano. He later proceeded to Alazahar University, Cairo, Egypt.
His interest in trading started when he was 8 years old. Then he would buy
cartons of sweets and retail them to make more money. He started out
understudying his uncle, Sanusi Dantata after his father’s death. Thereafter,
he got a loan of N500, 000 from his uncle in 1977 to start his own business,
with an order to offset it within three years. He repaid the loan within three
months. Dangote since then has moved from one success to another. Today he
directs businesses that have diversified from its early concentration on
commodity trading into banking, agriculture, manufacturing, textile,
transportation and oil.
Dangote who made his name in commodity trading especially sugar business,
exports cashew nuts, cotton, cocoa, millet and textile. He also exports fish.
Interestingly, he started out importing fish. He imports and sells rice,
vegetable oil, and cement. One of the strategies that moved him to the next
level was his distribution network. He decided to move from being just a
successful commodity dealer to more rounded entrepreneur with solid investments
in finance and manufacturing, his style is acquisition and buying into existing
companies.
He started out with Dangote General Textile product which he acquired from
owners thereby establishing control over the source of his trade. In 1993, he
acquired controlling shares in the Lagos-based Nigerian Textile Mills. He
invested enormous resources in re-capitalizing, refurbishing its machinery and
restructuring its management. And within a few years, he turned it from a loss
maker back to its days of good profits. He also bought 40 percent shares of the
Nigerian Salt Company to broaden his investment portfolio.
National Salt became a strong contender for the control of Nigeria’s salt
market.
For every sector that he ventures into, he ends up with praises. His
sugar company is believed to be controlling over 60% of the sugar market in
Nigeria. Imagine 60% of control of sugar to a population of 140 million people.
This is given due to the heavy demand by Nigeria’s soft drink industry,
breweries, and the increasing confectionery industries. Also to be considered
is his grip in haulage business, an edge which helps him to distribute faster,
cheaper and at a uniform price nationwide.
Today, with Benue Cement Company Plc, the Bachita Sugar Company, the Flour Mill
in Kwara State and the Obajana Cement Company, his group remains the biggest
indigenous conglomerate. His tentacle is in almost every sphere of human activity
all carefully packaged in over seven different companies which include Dangote
Textiles, Dangote Sugar, Dangote Cement, Blue Star Shipping, Blue Star
Investment, Dansa Foods, Dangote Flour Mills etc.
Dangote, ever humble, does not believe in tradition.
He does his things differently. Leadership they say is by example. For
instance, in commemoration of his 50th birthday anniversary, he boosted the
Nigerian economy with the commissioning of the 950 million dollar state of the
art Obajana Cement Plant. The plant is believed to be the largest of its kind
in Sub-Sahara Africa and the most modern cement facility in the world. It’s
expected to churn out about 4.4 million metric tones of cement per annum,
nearly 42% of current national cement consumption of 10.4m metric tons, and
generate about 10,000 jobs in employment. According to Dangote, Nigeria would
be ripe for export of cement to America and South America in 5 years time when
local production capacity is expected to hit 20 million tons annually.
Dangote in his effort to alleviate the level of poverty in the land set aside a
whooping $100 million to provide single-digit loan able funds for Micro, Small
and Medium Enterprises (MSMEs).
PHYSICAL VISIT
Visits were made to the followings:
1.
COMPANY PREMISES
2.
CORPORATE AFFAIRS
COMMISSION.
FINANCES
Subject Audited Account was not available as
at the time of our investigation.
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RISK RATING
ASSESSMENT: |
) GOOD Apparently
healthy, with adequate working capital to meet normal commitments. |
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CREDIT LINE
AMOUNT: |
FAIR |
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0CREDIT LINE
OPINION: |
Transaction with subject is considered to
be fair trade risk |
DIRECT INTERVIEW
1. Mr. Sunday -
The interview was conducted vial intercom. He however, declined further
information.
Subject has qualified, efficient, and dedicated staff that are all times
on the alert to respond to client needs.
INDUSTRIAL OVERVIEW/ OPERATING ENVIRONMENT
Industrial revolution occurring world wide has its pinch of impact on
the Nigerian economy. The nation at present is in a developmental process.
Thus, the need for construction materials has increased tremendously. On the
other hand, the prices of cement and other building materials have skyrocketed
in the country.
Due to increased cost and high level of financial involvement in running
such a scheme, most indigenous investors prefers to liaise with local the banks
or other credit factors that can make their vision a reality.
There are few cement companies in Nigeria, examples of which are; West
African Portland Cement, (WAPCO), Dangote Cement, Elephant Cement etc. These
companies are really doing well.
In a broad view, there is a need for the government to directly invest
into the infrastructural needs of this nation; this will help in reducing the
overhead cost incurred by cement manufacturing companies. The sector is vibrant
and promises huge profits for any likely investor.
CMT REPORT (Corruption, Money Laundering & Terrorism)
Public Notice from various sources including but not limited to: The
Courts, Nigerian Prison Service, Economic & Financial Crimes Commission
(EFCC), National Drug Law Enforcement Agency (NDLEA), National Agency for Food
& Drugs administration and Control (NAFDAC), Independent Corrupt Practices
and Other Related Offences Commission (ICPC) Etc.
No negative
information on subject from the above agencies as at the time of compiling this
report.
COMPANY LOCATION
The company is located on first floor, Marble House 1, Alfred Rewane Rd.
Falomo, Ikoyi Lagos. The location is easily accessible and it is strategically
sited close to the main round about when coming to Falomo from Victoria Island.
The route can also be accessed on the way to Kingsway. The building is a high
rise structure gigantically evident few miles from Awolowo Road, Ikoyi. The
building is located by the right hand side of the road when coming from Awolowo
Road, Ikoyi, Lagos.
OFFICIAL REMARKS
Having carried out all necessary research on subjects, our
investigations revealed that, the company, Obajana Cement Plc is duly registered in Nigeria, with a
registered address, Ministry of Commerce and Industry, Lokoja, Kogi, Kogi
State. While the operational office address is Marble House 1, Alfred Rewane
Rd. Falomo, Ikoyi Lagos.
Subject is into genuine business
transactions & ongoing concern.
All information contained in this reports
are from both primary and secondary sources.
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. |
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 |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)