Chairman, Vitafoam Nigeria Plc, BamideleMakanjuola has identified high cost of fund as the major problem hindering the growth of businesses in the country.
Addressing shareholders at the 52nd yearly general meeting in Lagos, he asserted that the company’s dependent on short-term fund for raw materials procurement and other expansion projects, amid high interest rate exerts pressure on the company’s profit margin, affected the company.
“This is coupled with the impact of other vagaries such as soaring global oil prices and foreign exchange rates, made the year very challenging as year on year growth fell short of target but despite the challenges, the business remains resilient and continues to offer promise for growth and high returns,” he added.
He said that the company’s expansion goals are set to position it to take advantage of the emerging opportunities, stressing that the company was poised to diversify its operations into other areas that are potentially lucrative and less vulnerable to extraneous factors, while reinforcing its position in the industry though innovations.
He stated that such innovations were the company’s investment in Vitapur Nigeria Limited, a high-tech insulation subsidiary.He said that the initiative would soon impact positively on the company’s bottom-line.
“Our hope is further reinforced by the interest and inquiries on mass housing delivery from various sectors, including governments in the West African sub-regions. We also continue to strengthen our soft furnishing subsidiary, Vitablom Nigeria Limited for greater returns.
Wit
h the Sierra Leone operations expected to commence in this first quarter, the chairman noted that the company would explore opportunities in the region and other neighbouring countries.
He pointed out that the company would continue to deploy new initiatives for value-creation within the group, including superior service delivery to maintain its brand leadership.
Reviewing the company’s performance at the AGM, Makanjuola explained that turnover rose to N15.6 billion from N14.1 billion achieved in 2011/2012 while the operating profit declined from N1.35 billion in 2011/2012 to N1.30 billion during the year under review. He said that the Profit after tax decreased to N414 million from N562 million posted in the previous year.
