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Notore Chemical Swells NGSE Capitalisation By N100.75bn

Photo caption: From left to right: Haruna Jalo-Waziri, Managing Director/CEO, Central Securities Clearing System (CSCS) Plc; Oscar Onyema, Chief Executive Officer, The Nigerian Stock Exchange (NSE); General (Dr.) Yakubu Gowon, Chairman, Notore Chemical Industries Plc and the company’s Group Chief Executive, Onajite Paul Okoloko, during the Facts Behind the Listing at the Exchange on Thursday, August 2, 2018.

The Nigerian Stock Exchange (NSE), on Thursday got a boost with the listing of 1.612bn units of fertilizer manufacturing giant, Notore Chemical Industries Plc by introduction at N62.50 per share.
The shares which were listed in the Agro-Allied & Chemical sub-sector of the NSE, adding N100.754bn to the market capitalization, has a free float of 16%, lowing that the prescribed 20% level.
Free float is the percentage of total number of shares that must be held by the general public defined as shareholders outside of the majority owners, management and board members. The Africa Finance Corporation (AFC) is one of its minority shareholders with 4.9% stake, while 77.07% stake is held by a vehicle registered in Mauritius. The current shareholders include: TY Holdings, owned by former Defence Minister, Gen Theophilus Yakubu Danjuma, 8.04%; while NPK Investment Ltd holds 4.60%, among others.
Addressing members of the capital market community during the fact behind the listing of the company in Lagos, Onajite Okoloko, chief executive officer of Notore Chemical Industries, said the exercise is part of efforts to support government’s effort to deepen the capital markets, besides increasing access to capital to fund its growth plans.
While expressing hope that the listing will add significant value to the nation and investment community, he said the entry of Notore into the stock market will also enhance liquidity, besides making the company’s share tradeable, while diversifying the ownership base and offering opportunities for more Nigerians to participate in Notore’s growth story.
Okoloko said the company’s urea plant currently produces 1,000mt of urea fertiliser on a daily basis, 75% of which is sold locally, while the remaining 25% is sold to leading international fertiliser traders like Helm AG, Ameropa and Yara and exported across West Africa, Southern Africa and Europe.
Notore, he said, recently secured $37m funding to execute the Turn-Around Maintenance (TAM) billed for completion in the second quarter of 2019, which would restore daily production capacity to its 1,500metric tons per day design capacity.
“We achieved 40% EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) margin in full year 2017 and we are on course to achieve same in full year 2018,” he added.
Afterwards, the Chief Executive stressed further that Notore would have an incremental production capacity of approximately 150,000mt annually over its current average annual production of 300,000mt.
As a fallout of this, he announced plans by the company in the long-term to “develop a 50megawatt gas-fired power plant and sell power in excess of the Notore’s requirement to the national grid through the Nigerian Bulk Electricity Trading (NBET) Plc.”
Before then, in the medium term, the company, he noted, would develop new compound fertiliser blends specifically for key growth crops, just as the company’s seed business would be expanded and a crop protection business developed to expand the fertiliser production capacity.
The company, he assured further, will continue with its strategy of creating substantial value and building a strong organisation that will support the Nigeria’s agricultural sector to grow by making available good quality inputs, besides training local farmers.
Notore’s key strength, he continued, lies in its huge potential to diversify its revenue base, helped by its favourable location within a gas hub and access to a jetty, that allows it export of products manufactured in the facility.
He added that dredging activities are expected to commerce on Notore’s privately owned jetty by next year, to increase its berth capacity from 15,000 metric ton to 25,000mt vessels.
“Leverage Notore’s free zone developer status to develop the proposed industrial complex into a gas hub and an integrated logistics service provider to the oil and gas sector”, he said.
Thursday’s listing is coming ahead of next year’s listing of Singapore-owned Indorama Eleme Petrochemicals Ltd, which currently seeks to double its Nigerian plant annual output of urea fertiliser to 2.8m tonne. There is also the 1.5m tonne fertiliser plant being developed in Lagos, Nigeria’s commercial capital by billionaire, Alhaji Aliko Dangote, which he expects to commission by end of the year.
Notore acquired the assets of state-owned fertiliser company National Fertiliser Company of Nigeria, based in the Niger Delta for $152m over 10 years ago and in 2012 entered into a joint venture with Mitsubishi Corporation to develop a new fertiliser plant, it said in the presentation.
In his opening remarks, chief executive of the NSE, Oscar Onyema congratulated Notore Chemicals for the bold and strategic decision to join the “prestigious club of quoted companies in Nigeria,” which indicates its commitment that the NSE “platform remains a veritable avenue for raising capital and enabling sustainable national growth.”

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