NASCON to grow tomato business through backward integration process

Shareholders’ laud firm’s 2017 performance

To consolidate its performance and sustain growth trajectory in the next financial year, NASCON Allied Industries has assured shareholders that the firm would prioritise its tomato paste business through the adoption of backward integration process and local sourcing of raw materials.

The Managing Director of the company, Paul Farrer, while fielding questions from shareholders during the 2017 yearly general meeting held in Lagos at the weekend, explained that the firm entered into the product category in response to an identified supply gap within the Nigerian market where local production and imports could not effectively meet local demand.

“Tomatoes is on top of our priority, we are looking at backward integration and what we would do concerning the tomato paste going forward. The plants are not producing but we are looking at backward integration option for the past.”

Reviewing its performance, the chairperson, Yemisi Ayeni explained that the company leveraged its core competencies and operational discipline to advance the overall business and deliver unprecedented returns to shareholders.

According to her, a review of the firm’s financial statements for the year ended December 2017 showed improvement in all indices. She explained that revenue increased from ₦18.2 billion in 2016 to ₦27 billion in 2017, while profit before tax jumped by over 100 percent from ₦3.5 billion in 2016 to ₦7 billion.

Profit after tax also rose massively from ₦2.4 billion in 2016 to ₦5.3 billion, the biggest leap in the last 5 years.“Earnings per share also increased from ₦0.91 in 2016 to ₦2.02 in 2017 while a dividend of ₦3.97 billion approved at the AGM, amounted to ₦1.50 per share. This represents a 110 percent increase from the ₦0.70 dividend paid in 2016.

“Salt earnings remain a key driver of revenue. Revenue from salt comprised 81 percent or ₦22.2 billion of the ₦27 billion, largely unchanged from the proportion of revenues it generated in 2016 while seasoning generated two percent of the revenues.

“NASCON also improved revenue across its geographical locations. Revenue from the eastern part of the country increased from ₦1.1 billion to ₦2.2 billion, the west also moved from ₦5 billion to ₦5.6 billion while the northern part of the country showed the biggest improvement as it jumped from ₦12 billion to ₦19 billion.”

The shareholders, who approved a dividend of N1.50 kobo per share at the meeting, also commended the board and management of the company for posting good results in the full year ended December 31, 2017.

Specifically, the Chairman, Trust Shareholders Association of Nigeria, Alhaji Muktar Muktar commended the company’s performance and appreciated the board and management who worked tirelessly to ensure that shareholders are rewarded with dividends.

According to him, a total revenue increase of 48 percent in the year under review is a great feat given that many companies recorded losses as the domestic economy gradually recovers from recession.He added that the firm adopted global best practices in maintaining strategic reserves, which shows that the management cares about the future growth and expansion of the company.

Another shareholder, John Evitar in his remarks commended the board and management on the improved performance especially in consistent payment of dividends.