18 December 2012

Nigeria: FG, Notore, SEC Hail Agric Stocks' Performance

The Minister of Agriculture and Rural Development, Dr. Akinwunmi Adesina, Group Managing Director Notore Chemical Industries, Jite Okoloko, and the Director-General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh, have all expressed their excitement over the outstanding performance of agricultural stocks on the Nigerian Stock Exchange (NSE).

The Minister described their performances as several times better than those of the companies in the consumer goods industry. He was speaking at the 'Financing Nigeria's Agricultural Revolution' workshop jointly organised by SEC and the Ministry in Lagos.

"Agricultural stocks on the Nigerian Stock Exchange have outperformed the rest of the market. Companies like Presco and Okomu Oil Palm who reported an annual revenue growth between Full Year 2010 and 2011 of 58 per cent and 31.7 per cent respectively, with dividend yields of 8.0 per cent and 15 per cent respectively.

"This performance is several times better than those of the companies in the consumer goods industry. For example Nigerian Breweries recorded 22 per cent, Nestle, 11 per cent; UAC, 11.5 per cent and Unilever, 14 per cent," he stated.

He further disclosed that over this same period, the commercial banks actually performed much lower than the agricultural stocks, with UBA at -4.8 per cent, GTB at - 2.9 per cent and Zenith at 9.6 per cent.

"And yet, these consumer goods and banking stocks continue to have higher Price-Earnings ratios when compared to the agricultural stocks, reflecting the fact that the market undervalues these stocks," he pointed out.

The Minister also commended Notore Chemicals, which plans to list on the stock exchange very soon, for being major a part of the agricultural revolution taking place in the country today.

"I want to thank Notore for their contributions because the backbone of any agricultural revolution is the access to inputs. Besides fertiliser, Notore and others have produced hybrid seeds which have gone a long way in increasing yield per hectare on our farmlands," he said.

Expressing her excitement over the very impressive performance of agric stocks on the NSE, Oteh said that it was instructive to note that some of the most successful stocks on the exchange today are agricultural companies.

She said that it was particularly fascinating that in 10 years a company like Presco Plc had recorded a 600 per cent appreciation in share value.

"I would like to see many agro businesses come to register on the stock exchange just like Notore Chemicals is getting set to do in a couple of months, as this will further prove that agriculture is now a very well-run and profitable business in Nigeria," she said.

In his remarks, Okoloko said that the company was committed to agricultural yield improvement through the use of hybrid seeds and education of farmers on the fertiliser culture.

"Today Notore as the champions of the green revolution in Nigeria is doing half a million tonnes of fertilisers and within the next five years we would be at 1.75 million tonnes. And on the seed side our first commercialised rice and maize seeds are already set to go into the market and we are going to continue to expand our seed capacity using our distribution channels for fertilisers for the seeds as well," he said.

Also speaking, a Director of Presco, Peterside Atedo, disclosed that the company has over 3500 employees.

He said that "the interesting thing about agriculture is that you see increase in sales happening year after year looking like it can go on forever". He said that Presco's quality was higher than imports in terms of shelf-life and freshness and that the yield per hectare for Presco is among the highest globally.

Copyright © 2012 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.