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Dunlop invests N7bn in factory, begins public offer


November 23, 2006/punch



Dunlop Nigeria Plc has invested about N7bn in the expansion of its factory for the production of all-steel radial truck tyres as part of the development of its products to meet the yearnings of its customers.

The Chairman, Mr. Dayo Lawuyi, disclosed this at the completion board meeting for the company’s public offer and rights issue in Lagos on Wednesday. He added that Dunlop was targeting N12bn as turnover in 2007.

The company is offering for subscription 1.5bn ordinary shares of 50kobo each at N2.50 per share and rights issue of 756,000,000 ordinary shares of 50 kobo each for every one share already held at N2.30 per share.

According to him, the offer will open on November 29, 2006 and close on January 5, 2007. United Bank for Africa Plc and Ecobank Plc are the Joint Lead Issuing Houses to the offer, while Sterling Capital Limited is the Joint Issuing House.

Lawuyi said, “We have completed the expansion of our factory for the production of all-steel truck radial tyres for big buses and trailers. The factory has been completed, the products are being manufactured and the products are being sold.

Under the first phase of the expansion programme, Dunlop plans to produce 300,000 units of the big radial truck tyres with a forecast of an annual profit of between N2.5bn and N3bn in the next three to four years.

The chairman said that the rights issue and public offer were to ensure that the company liquidated part of the loans expended on the project and also provide the needed capital for its operations as Dunlop joined the league of companies with billions in turnover.

Lawuyi urged investors to stake their money in the company saying, “This is a real manufacturing company, by the time you take the raw materials which is raw rubber, carbon black and everything that we put in. We come out with a product that you don’t even see any semblance of the raw materials.”

He said that Dunlop would continue to ensure that jobs were provided for the teeming population and ensure improved economy for the good of all Nigerians. He added that the tyres had been well received in the market as big trailers now used them.

“What we are doing is to repay part of the money to the banks and to provide sufficient working capital to ensure that the products are produced in the right quantity,” Lawuyi said, adding that tyre manufacturing was a serious business that required a lot of money to maximise production.

The Managing Director and Chief Executive Officer, Dunlop, Mr. Mohammed Yinusa, said that as the company grew into a mega organisation, it required huge working capital from which it would pay the short-term fund that was used in building the factory. He expressed optimism that the offer would be over-subscribed.

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