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ODU ’A INVESTMENT COMPANY LIMITED

Odu’a Investment Com-pany Limited recently took another giant stride in its Property Redeploy-ment Programme by con-verting the old Odua Tex-tile Mills at Ado-Ekiti to an Enterprise Development Centre. The Textile Mills was a giant factory that employed many citizens of the state until it be-came moribund due to the multi-faceted chal-lenges that crippled tex-tile industry in Nigeria. In order to optimize the as-sets, Odu’a Investment Company Limited, in col-laboration with the Ekiti State Government, de-cided to redevelop the factory site into an Enter-prise Development Centre with the following activi-ties: Builders’ Mart, Skill Acquisition Cen-tre, Artisans’ Village and Industrial Park. While Builders’ Mart and Skill Acquisition Centre are already completed, Artisans’ Village and In-dustrial Park are slated for the second phase of the project. According to the Group Managing Di-rector, Mr. Adebayo Ji-moh, “the overall objec-tive of putting up the cen-tre was to support the effort of the administra-tion of Governor Fayemi in empowering the peo-ple, promoting entrepre-neurship and stimulating the soc io-economic growth of Ekiti State.” At

ODU’A CONVERTS OLD TEXTILE MILLS TO ENTERPRISE DEVELOPMENT CENTRE IN ADO-EKITI

October, 2011

I N S I D E T H I S I S S U E :

GLOBAL ECONOMY 2

EURO ZONE DEBT CRISES & DEVEL-OPING ECONOMIES

2

DOMESTIC ECONOMY

3

ASSOCIATE COM-PANIES’ RE-PORT/UPDATE

6

SUBSIDIARY REPORT/PROJECT UPDATE

7

MACROECONOMIC INDICATORS

8

FLASH POINT

ECONOMIC & BUSINESS MONITOR

the Commissioning Ceremony, which took place on October 15, 2011, the Minister of Trade and Investment, Mr. Olusegun Aganga, commended the initia-tive and noted that “the development centre is in line with the thinking of the Federal Government of Nigeria.” He promised to support the Skill Ac-quisition Centre by get-ting the Centre accred-ited with Trade Test Certification as the cen-tre is poised to solve unemployment problem noting that N50 billion employment creation funds was targeted to-wards development cen-tres. Mr. Olusegun Aganga advised Odu’a to

franchise the initiative in order to replicate it in other states of the fed-eration. In his own speech at the ceremony, the Ekiti State Governor, Dr. Kayode Fayemi, said the state was committed to the economic emancipation of the citizens of the state. According to him, “the state government be-lieves in programmes on investment promotion and development of small scale industry. These two programmes are geared towards empowering the people and at the same time creating wealth”. ...Continues on page 4

SPECIAL EDITION

NEW FACE OF LAGOS

Volu me 1 , Issu e 5

for 17 years. The epicenter of 2011 financial and eco-nomic turmoil is once again the developed world, and in particular the Euro-zone.

Greece's inability to repay its debt is pushing the EU towards the biggest crisis in its history, with possible significant spill-over effects within the euro area and beyond. If no decisive ac-tion is taken, a Greek sov-ereign debt default is likely to trigger a domino effect, which could affect major European economies such as Italy and Spain, with a severe impact on France, as well as the UK and Ger-many. As a result of these con-cerns, there is a trend to-wards reversal of capital flows to emerging and frontier markets, and a recent depreciation in the national currencies of many economies in Asia and Latin America includ-ing India, Indonesia, Ma-laysia, South Korea, Brazil, Chile, Colombia, and Mex-ico, among others. In Af-rica, the national curren-cies of Kenya, South Af-rica, Gabon, Ghana and

Nigeria have also been under pressure. Central banks have generally responded through di-rect intervention in the foreign exchange mar-

ket to stabilize the cur-rency and, in some cases, a significant hike in policy rates. It is worthy of note that fund managers have not been eager to exit envi-ronments with relatively high real rates of inter-est and benign inflation outlook.

In a context of in-creased global interde-pendence, developing countries are unlikely to remain immune to the debt crisis in the devel-oped world. Sooner or later, they will feel the effects along three pos-sible channels: • Financial contagion. Balance sheet problems of European banks, volatile stock markets and reduced investor confidence may prompt credit lines cuts and delayed or cancelled

Global economic condi-tions are deteriorating sharply as evidenced by the increased downside risks and sluggish growth caused by fiscal con-straints and declining confidence in the resil-ience of the financial sys-tem. Advanced econo-mies are projected to end the year with an av-erage slow pace of about 1.5%, down from 3.1% in 2010; and China, a key driver of the global recovery after the 2008-09 financial crisis, is ex-periencing declining growth for the third con-secutive quarter. Fears of a double-dip recession are haunting markets around the world. Global stock mar-kets have tumbled re-peatedly on worries over Europe's debt crisis, while the euro continues to lose ground against the US dollar, having experienced another sharp drop after Ger-many dashed hopes for a resolution of the euro-zone crisis. Investor con-fidence has reached panic levels, with the Credit Suisse's Global Risk Appetite Indicator at a 30-year low. In addition, a series of sovereign credit down-grades has hit many de-veloped countries: the US lost its triple-A credit rating for the first time in its history, Italy and Spain experienced sev-eral downgrades, and France's triple-A rating is under threat. unemployment is on the rise throughout ad-vanced economies with the UK reaching it high-est unemployment level

investments in the devel-oping world. • Stalling growth and fiscal consolidation plans. Aus-terity packages introduced by European governments are likely to weaken de-mand for developing coun-try exports and might lead to cuts in aid spending. Moreover, high unemploy-ment rates associated to weak economic activity in developed countries may translate into fewer remit-tances directed to develop-ing economies • Euro depreciation against the dollar. A weak euro may put further pressure on developing countries' dollar-based exports and diminish remittances pur-chasing power. The magnitude of the im-pact of the eurozone crisis on developing countries will depend on the speed and type of policy solutions implemented by European countries. So far, the crisis in the global economy has deepened because the po-litical leaders in Europe and the Americas seem unable or unwilling to put together a potentially ef-fective solution package to address the debt, growth and unemployment prob-lems. No doubts, global growth prospect has been extremely weak in 2011 and the outlook for 2012 is uncertain. Consequently, the developing economies should "hope for the best and prepare for the worst" in 2012.

Source: IMF, MPC, CBN, Article by Isabella of Over-seas Research In-stitute

Eurozone Debt Crisis and Developing Economies

Illustration by R & P Depart-ment

Economic & Business Monitor

NIPC proposes 50 years incentive potential to investors in Nigeria The Nigerian Investment Promotion Commission, NIPC, has proposed to stakeholders in the real sector a corporate tax holi-day of between 5 to 50 years for investors willing to invest in Nigeria, de-pending on location, giving disadvantaged areas more years, and depending on the sector and technology the intending investor will like to venture into. Fol-lowing this development, a draft proposal of the sector specific incentives for in-dustrial policy was recently presented by NIPC in La-gos to stakeholders in the real sector to seek private sector input. The final presentation of the com-plete industrial policy will be made to the Federal Executive Council for con-sideration. This is expected to be publicly presented by March 2012. Alhaji Mustafa Bello, the Executive Secre-tary/CEO, NIPC, while speaking at the presenta-tion ceremony in Lagos, said the entire idea of the development of the sector specific policy document relied on the provisions of section4(1), 22&23 of the NIPC act 16 of 1995, which empowers the commission to encourage and promote policies that will enhance a friendly investment envi-ronment area in Nigeria. The policy is a model structured along the Ma-laysian, Indian and other success fu l emerg ing economies. It covered all sectors of the economy with provision for sectors of the future. It also ad-dressed deficiency in the business environment through generous provi-

sions of incentives and improvement in policies. Recommendations as re-gards incentives, conces-sions and policy improve-ment based on adoption of Global best practices were adopted to generate the document.

Govt Reviews Frame-work for Budget 2012

T he Executive arm of the government has reviewed some

of the major elements in the Appropriation Bill. The changes include the downward review of the budget benchmark from $75 to $70 per barrel, fiscal deficit of N1.1 tril-lion and exchange rate of N155 to the dollar. The Director, Budget office, Dr. Bright Okogu, made public the changes at an interactive Session with the senate committee. Dr. Okogu said that al-though the oil benchmark for 2012 was put at $75 per barrel in the Medium Term Expenditure Frame-work (MTEF) forwarded by President Goodluck Jonathan to the National Assembly, it had been discovered that it would not be realistic and there-fore reduced to $70 per barrel. Okogu also hinted that the exchange rate being contemplated by the Executive in the new budget is now N155 to the dollar, Gross Domes-tic Product (GDP) 7.2 Per cent and inflation rate of 9.5 per cent. He ex-plained that these figures were arrived at after talks with the National Planning Commission (NPC). On the country’s domestic debt profile, Okogu said an arrange-ment had been made to

NIGERIAN ECONOMY: GOOD FUNDAMENTALS WITH CAU-TION

R eal GDP growth was estimated at 7.4% in the third

quarter of 2011. This is an obviously good fun-damental but with lim-ited impact on the qual-ity of life of Nigerians. In a similar vein, inflation came down to 9.3 per cent in August. Despite this, Naira has come un-der increasing pressure, and has recently traded outside the band of N150 +/- 3.0 per cent. The increasing pressure on the domestic cur-rency is partly not un-connected with the gen-eral concerns about the likely impact of a double dip recession on oil prices and already de-clining foreign reserves. Second, subsidies on Premium Motor Spirit (PMS) is a source for worry as its removal will add at least US$10 bil-lion to national reserves annually but will also fuel inflation. Another source of concern is the global food and en-ergy prices that remain elevated. As an import dependent country, global food prices could spill over to higher do-mestic prices. Food in-flation inched up to 8.7 percent in August from 7.9 percent in July. As global commodity prices continue to remain at an elevated level and given that the country import food stuff such as rice, there may be height-ened upside risks to do-mestic inflation.

reduce it to about N500 bil-lion. CBN to devalue Naira to N155—N156 Per Dollar says Sanusi. Nigeria’s Central Bank may lower its official target for the naira to N155—N156 per dollar and aim to keep it stable around that level over the next year, says Governor Lamido Sanusi. The Central Bank of Nigeria has been struggling to keep the naira within a bound of 3 percent above or below N150 per dollar as oil prices declined and demand for im-ports surged. The bank pegs the currency to help keep price pressures under control in Af-rica’s biggest oil producer. The naira has slumped 4.7 percent against the dollar on the inter-bank market since July 1, reaching as low as 164.15 on Oct. 6. “People will know that in the next 12 months the cen-tral bank will keep the naira within that band,” Sanusi said. “As long as we are not running out of reserves at an outra-geous rate we’ll try to keep that stability.”Foreign ex-change reserves have dropped by $1.5 billion to $33 billion between Feb. 11 and Oct. 27, according to central bank data. Nigerian benchmark Bonny Light crude has fallen 14 per-cent from an April high. Sanusi responded to the naira’s de-cline by raising the benchmark interest rate by 275 basis points to 12 percent on Oct. 10, the highest level since the rate was introduced in 2007. Inflation accelerated to 10.3 percent in September from 9.3 percent in the previous month, the statistics office said on Oct. 14.

DOMESTIC ECONOMY



ACTIVITIES AT THE ENTERPRISE DEVELOPMENT CENTRE

the centre will be a per-fect place for all players in the building and con-struction industry. Major players like Lafarge-WAPCO Plc and Nigerite Limited have indicated their willingness to ac-quire space in the centre. Other players like Dan-gote Cement Plc, Flour Mills of Nigeria Plc, Askar Paints Limited, Tower Aluminum Limited, Nige-rian Wire and Cable Plc etc will follow suit and this will create exciting opportunities to showcase latest building trends, products and services.

SKILL ACQUISITION CENTRE Ekiti-Odua Skill Acqui-sition Centre is jointly established by the Ekiti State Agency for Job Creation and Employment and Odu’a Investment Company Limited. The

programme is aimed at positive engagement of youths for the purpose of wealth creation and their economic empowerment, which will result in sustain-able and economic develop-ment of Ekiti State. The fo-cus is to train and equip youths with requisite voca-tional skills and high techni-cal education with a view to transforming them into entrepreneurs of tomorrow. The centre will take-off with eight (8) vocations namely: Metal Fabrication and Weld-ing Wiring and Electrical Rewinding, Auto-Mechanic Works, Fashion Designing, Painting/Arts and Crafts, Carpentry and Joinery, Ca-tering and Events Manage-ment and Computer Hard-ware/Telephone Repairs . The duration of the pro-gramme is 6 months and will be blended with short courses and conferences. Odu’a has invested in mod-ern tools and state-of-the-art equipment as well as

BUILDERS’ MART The Builders’ Mart is the fruit of the partner-ship between Ekiti State Enterprise Development Agency and Odu’a In-vestment Company Lim-ited. The initiative is to support Ekiti State Gov-ernment’s Urban Re-newal Programme which, among others, includes beautification of Iyin–Ado Ekiti road. The relo-cation of building materi-als dealers to this centre will assist in reducing environmental pollution and traffic congestion in the city. The front eleva-tion of the factory has been opened up to ac-commodate sixty (60) shops, which will cater for the requirements of building and construction materials dealers, inte-rior decorations/accessories suppliers and building advisory ser-vices. It is expected that

engaged the services of tested and accom-plished professionals, some of whom are citi-zens of Ekiti State, in various fields as In-structors for the train-ing of the participants. The curriculum is de-signed not just to im-part practical and theo-retical skills, but to train the participants on the rudiments of setting up individual businesses and growing such to become great employ-ers of labour in future. Odu’a is also working on partnerships with well established organiza-tions within and outside Ekiti State for industrial attachment of the stu-dents to expose them to industry best practices in their vocations.

Continues on Page 5


ACTIVITIES AT THE ENTERPRISE DEVELOPMENT CENTRE

Continues from page 4

ARTISANS’ VILLAGE

In this centre, a provision would be made for Arti-san’ Village in the second phase of this project. This will be a community for talented and trained crafts people such as machinists weavers, welders, paint-ers, carpenters, tailors etc, some of whom will be graduates of the Skill Ac-quisition Center. This is in recognition of the fact that the development of arti-sans and small scale indus-tries has assumed increas-ing importance in the de-velopment of any nation’s economy. In cooperation with the Ekiti State Enter-prise Development Agency, Odu’a intends to create basic infrastructures for the village and also en-courage financial institu-tions to extend micro cred-its to the artisans with a view to making their tal-ents and skills commer-cially viable.

INDUSTRIAL PARK Lastly, Odu’a plans to fur-ther promote industrial activities at the Enterprise Development Centre with an Industrial Park. When completed in the second phase, the park will offer appropriate sites, premises and warehouses to poten-tial investors. Odu’a is also determined to support the investors with high quality services for the growth of their businesses.

SHOPS AT THE BUILDERS’ MART ENTRANCE OF EOSAC

METAL FABRICATION UNIT

FASHION DESIGNING UNIT PHONE REPAIRS/COMPUTER UNIT

COMPUTER/LIBRARY ROOM

Associate Companies’ Report/Update: €350m Lakatabu cement plant begins production …….raises hopes of price fall….

T he relative supply equilib-rium and price stability in the cement industry in re-

cent times have been traced to the improvement in the supply of the product to the market, which chiefly derived from the new pro-duction inflow from one of the leading manufacturers, Lafarge WAPCO Cement Company Plc’s new plant. According to the man-agement, what remains is for President Goodluck Jonathan to inaugurate the plant officially. For one and a half months, the new cement plant has been living out its dream of adding 2.2 million metric tones of cement to the na-tional productive capacity. Citing the declining price of cement as an evidence of the new devel-opment, the Managing Director of the company, Mr. Samy Abdelka-der, said only improved production and supply could bring down the price of cement in the country. According to him, the commence-ment of operations at the plant would bring Lafarge WAPCO group’s total capacity in Nigeria up to eight million metric tones. The price of a 50-Kilogramme bag of cement cur-rently ranges betweenN1,750 and N1,800 at key selling points in La-gos. The current price has been de-scribed as a major drop from what was obtained between June and July this year, when a bag was sold for between N2,300 and N2,500. According to the company, the new project will enable Lafarge to raise its current overall capacity to 4.2mts to keep pace with the growth in the Nigerian cement mar-ket. The construction of the plant, known in the industry as a Brown-field cement plant, was targeted at producing 5,000mts per day or 1.55mts per annum of clinker. The total production from the plant, the company said will be taken to 2.2mts per annum of cement, with clinker production of 1.4mts. For the effective running of the plant without any power problem, the plant has an adjoining power plant with 90MW installed capacity


(76MW effective output capacity; 50MW to power the new line and 26MW to power the existing line). Operationally, the company con-structed a 4.7-kilometre-long double conveyor belts to trans-port limestone and other input between the quarry and the new plant. National cement demand as at December 2010, was put at 14 million metric tones. The Execu-tive secretary, Cement Manufac-turers Association of Nigeria, Mr. James Salako, has recently said that Nigeria would meet its local cement need and become an ex-porter of the product before the end of the year. He had said at a press briefing with journalist in the wake of the rising price of cement in Lagos, “This year, we expect all the new facilities cur-rently under construction to come on stream. All things being equal, we expect to start 2012 with a total installed capacity of 28mts per annum. We do not expect anything less than 60 per cent

performance from most of the new plant in 2012”. According to him, if the Federal Government continue with the strict implementation of the backward integration policy, Man's expectation is that new entrants will come into the business of cement manufacturing, adding that the pre-sent tempo of growth in the cement industry will be sustained. He said the objective of the association was not just to be self-sufficient in ce-ment manufacturing, but to become a major exporter of the product, which he considered achievable with the support of the government.“The ultimate is not just to become self-sufficient in cement production, but to become a net exporter of the product. The Federal Government has given 2013 for the achievement of the self-sufficiency in the cement production but we can see clearly from the above fact that becoming a net exporter of the product is attain-able even before 2010,” he said Source: Punch Newspapers


WEMABOD ESTATE LIMITED TO UPGRADE DEVELOPMENT HOUSE APAPA, LAGOS

As part of its property re-development programme, The management of WE-MABOD Estate Limited has commenced plan to upgrade Development House Apapa. This prop-erty is less than 5 min-utes drive to Apapa Port. It is 8,002.8m2 with enough space for a car park. The property will be upgraded into luxury of-fice spaces with modern facilities, while the rear land is to be developed into a seven-storey car park with retail shops, events’ center and ultra-modern cinema hall.

SUBSIDIARY REPORT/PROJECT UPDATE

Isometric View Of The Proposed Multi-Level Car Park With Shops & Events’ Centre

Aerial view of the Proposed Multi-Level Car Park with Shops & Events’ Centre

ODU’A TO DEVELOP AKURE SHOPPING COMPLEX

The Akure Builders’ Mart will be a one stop shop for building mate-rial dealers in Akure with a view to comple-menting the State Gov-ernment efforts at de-veloping the state capi-tal through cluster sys-tem. This will also im-prove the environment and reduce congestion in the metropolis. The Management is of the opinion that the land size of 4050m2 will be adequate to accommo-date dealers from vari-ous segments of the building materials mar-ket. 3-DIMENTIONAL PERSPECTIVE SHOWING THE EXTERIOR VIEW OF THE BUILDERS

MART

A M o n th l y b u l le t in P u b l i c a ti o n C o m pi l e d b y R es ea r c h & P l a n n i ng De p a rt me n t o f

O d u ’ a I n ve s tm e nt C o m p an y L i m it e d

Cocoa House Building, Floors 20, 21, 22 & 23 e-mail: [email protected] Oba Adebimpe Road,Dugbe, P.M.B. 5435, Ibadan www.oduainvest.com.ng

MACROECONOMIC INDICATORS Economic Snapshot

Sept Oct

Oil Price 111.9 112.7 MPR

9.25 12.0

Inflation Rate % 10.3 10.5

Max. lending rate 22.27 23.25 Real GDP % 7.8 7.4

Monthly Average Exchange Rates

Sept Oct

$USD 153.91 154.12 €EUR

210.9 205.6 POUNDS

241.29 241.76

SOURCE: NBS, CBN, MPC, BUSINESSDAY


EXTERNAL RESERVES & CRUDE OIL (BONNY LIGHT) PRICE

FX SUPPLY & DEMAND

A Monthly bulletin Publication Compiled by Research & Planning Department of Odu’a Investment Company Limited

Cocoa House Building, Floors 20, 21, 22 & 23 e-mail: [email protected] Oba Adebimpe Road,Dugbe, P.M.B. 5435, Ibadan www.oduainvest.com.ng

MACROECONOMIC INDICATORS Economic Snapshot

Sept Oct

Oil Price 111.9 112.7 MPR

9.25 12.0

Inflation Rate % 10.3 10.5

Max. lending rate 22.27 23.25 Real GDP % 7.8 7.4

Monthly Average Exchange Rates

Sept Oct

$USD 153.91 154.12 €EUR

210.9 205.6 POUNDS

241.29 241.76



EXTERNAL RESERVES & CRUDE OIL (BONNY LIGHT) PRICE

FX SUPPLY & DEMAND

odu ˇa converts old textile mills to · pdf filetion is taken, a greek sov- ... indian and...

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