Notore Chemical Industries Plc is targeting 500,000 tonnes of fertilier output after the company completed its Turn Around Maintenance (TAM) programme.
Group Managing Director, Notore Chemical Industries Plc, Ohis Ohiwerei, in the company’s second quarter report, said despite suffering several setbacks caused by the coronavirus pandemic, the company remained resilient to deliver on its programme.
“We are pleased to announce the successful completion of the TAM programme.This was a massive undertaking that involved vendors, parts suppliers, VSMs, OEMs from across the globe, and best-in-class engineering companies. Despite experiencing further interruptions to our supply chain and logistics occasioned by the global COVID-19 pandemic emergency, which directly impacted the original anticipated completion date for the TAM, the Company remained resilient and overcame the challenges to deliver a successful TAM. This signifies a key milestone to repositioning the Company and turning around its fortunes,” Ohiwerei said.
He added that the completion of the TAM ushered in a new phase in the company’s growth with a focus on optimisation and profitability.
According to him, Notore is committed to continuous improvement as it expects a major upturn in the plant’s reliability and production output to meet and sustain its 500,000 metric tonnes yearly nameplate design capacity.
“Achieving this level of production output will not only lead to significant increases in the company’s cash flows from operations, but also substantial increases in revenues annually. It is worth noting that a sizeable portion of the additional post-TAM revenue will contribute straight to the company’s bottom line, a major key to returning the company to profitability,” Ohiwerei said.
He said the production and sale of Notore NPK fertilizer into the domestic market also contributed to the revenue, adding that with the ramp up of NPK production, Notore expects substantial NPK production and sales during the 2021 financial year.
He pointed out that sale of Notore seeds to Nigerian farmers has also continued in furtherance of the corporate vision to be a major contributor to the development of Africa.
“ Additionally, while leveraging the Company’s seeds business, robust supply chain and distribution network, Notore intends to expand further into other products such as rice production. During the period under review, we successfully completed phase one of the Notore rice pilot program, which resulted in the production of 5,000 50kg bags of high-quality Notore rice. We have commenced the second phase of the Notore rice pilot program, which is expected to result in the production of 715MT of rice paddy. These additional initiatives will further diversify the Company’s revenue stream, boost profitability, and consolidate customers’ loyalty,” Ohiwerei said.
He said the company believes that the domestic fertilizer market is yet to reach its full potential, as the consumption of fertilizer per hectare of arable land in Nigeria is still far below the 200kg per hectare recommended by Food and Agriculture Organization.
He added that the demand for Urea and compound fertilizers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the Country is also substantial.
“The company will continue to aggressively explore and work on various financial initiatives to further reduce finance cost, such as the restructuring of its capital structure to achieve an optimal mix of debt and equity. The projected cost savings from the restructuring is expected to boost the Company’s profitability,” Ohiwerei said.
Ohiwerei noted that Notore expects to greatly exceed its 2020 financial year production volumes, revenue, and operating cash flows.
“With respect to the fertilizer market dynamics, the Nigerian fertilizer demand remains robust and is expected to continue to grow, considering the Federal Government’s strong and decisive policy focus on agriculture as one of the keys to unlock the diversification of the Nigerian economy,” Ohiwerei said.
According to him, while the business has been faced with many challenges over the past years, Notore is now re-positioned for a great future with the completion of TAM.
He assured that as it looks to the future post-TAM, the next phase of Notore’s growth will be focused on diversification, optimization, and profitability.
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