Speaking at the company’s yearly general meeting, shareholders also threw their weight behind the company’s ongoing expansion agenda aimed at strategic positioning for future challenges.
National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said that “there is future in Lafarge Wapco. The ongoing investment is in order. We have to be proactive. A good management must be proactive”.Chairman of Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, who spoke in a similar vein, said the management of the company should be commended for paying dividend despite the challenging business environment in 2009.Okezie added that upon completion, the ongoing project at Lafarge Wapco would translate into improved dividend for shareholders.
Urging other shareholders to pray for the successful completion of the ongoing expansion agenda, Okezie said the involvement of foreign investors in the affair of the company “shows confidence”.Chairman of Lafarge Cement Wapco Plc, Chief Olusegun Osunkeye, in his speech to shareholders, said the company was confronted with numerous challenges during the year under review.Osunkeye explained that production of cement from the two plants at Ewekore and Sagamu were adversely impacted by an acute gas supply disruption for 82 days and 250 days respectively.
He explained that as part of measure to respond to the gas situation in the country, the management of the company introduced the use of expensive Low Pour Fuel Oil (LPFO) According to Osunkeye, the development gave rise to the shortfall of about six per cent in cement dispatches compared to 2008.He also blamed the development on the decline of 32 per cent in profit to N8.27 billion compared with N12.12 billion achieved in 2008.
Explaining further, Osunkeye said deliberate and calculated steps have been taken to ensure that the company modernises its plants and employ state-of-the-art equipment such as a new packer in Sagamu, pointing out that “this will boost cement dispatches and enhance turn around time of our dispatch lorries”. Also, according to information made available, a dual-firing project has been completed in Sagamu while that of Ewekoro would be commissioned by mid-year. The project is expected to give the company required flexibility to run on both natural gas and LPFO as occasion demand.
“The future of the company lies in its ability to increase production capacity and to use modern machinery and equipment for its operations. This will enable the company compete favorably in the area of cost and quality.“To this end, the company has embarked on an ultra modern 2.2 million metric tones line, which will take the aggregate company capacity to 4.2 million metric tones. Steady progress is being recorded and the project is moving as planned”, said Osunkeye.
Making reference to Lafarge Cement expansion project, he said that medium term syndicated bank loan, arranged to fund the Lakatabu expansion project, was completed in 2009, adding that it has a four-year duration with a two-year moratotium.Said Osunkeye: “I am happy to report that the construction work is going on as planned. The Lakatabu project is expected, on completion, to add 2.2 million metric tonnes to the current two million metric tones capacity from the two plants in Ewekoro and Sagamu.
“The project will continue to create value for our shareholders and all stakeholders at completion.The plant would be commissioned during the second quarter of 2011.“The Lakatabu expansion project is being part-financed from the company’s internal cash flow. With the company’s performance in 2009, the initial assumption on cash flow had to be reconsidered.