‘How infrastructure challenges limit real sector’s earnings’
The Group Managing Director/Chief Executive Officer of Chemstar Paints Industry Nigeria Limited, manufacturer of Finecoat and Shield Paints, Dr. Emmanuel Aderemi Awode, has described the first half of 2015 as difficult and not very good business year for the manufacturing sector in the country.
This was as he attributed the poor performance of the sector, especially the low sales volume to the unhealthy socio-political and economic situation in the country, including naira exchange, the Boko Haram insurgence and other financial challenges facing the nation’s business environment.
Awode disclosed this during the company’s half year sales conference, a forum where the company assessed its operations and activities in the last six month, in Ogun State.
The GMD, who noted that the company has however mapped out strategies to combat the harsh business environment, appealed to the Federal Government to intervene in the infrastructural development of the country, saying the resources that should have been ploughed back to the business and create more employment for Nigerians were being spent by manufacturers on running their factories, providing electricity, taking care of access roads to their factories and purchasing fuel.
While lamenting that the company’s expenditure in the half year rose astronomically due to infrastructural decay, bad roads, cost of diesel, high cost of import duties and the general rise in production cost, which in turn has affected the profit margin, Awode insisted that those were the major causes for the marginal profit posted by the company in the half year over what it posted last year.
According to Awode, the paints company was able to record a marginal increase for the half year in 2015 over that of 2014 in its sales profile and turnover.
The half year sales conference, he noted, is a normal yearly forum to review the company’s activities and business operations in the half years from January to June, with a view to planning effectively for the remaining six months of the year.
“But, despite the harsh economic environment, the company was still able to post a marginal increase over what it made in 2014,” the GMD said.
His words: “We have very marginal increase for 2015 over 2014 and that is expected considering the fact that 2015 has not been a very good year for manufacturers. This half year sales conference is critical to our operations considering the economic situation in the country and the need for us, as a company to plan and restrategise for the remaining part of the year in order to have a successful financial year in 2015.
“If the government could come to our assistance by fixing these infrastructural facilities, we will be able to use the money spent on these facilities to improve our manufacturing and employ more workers, thereby reducing the high rate of unemployment in the country.”
He, however, noted that part of the strategies mapped out to cushion the effects of the harsh business environment, was the promo launched recently for painters, which according to him, “has gone a long way in impacting meaningfully on the company’s operations and sales.”
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