Index slips further by 0.13% amid sustained profit- taking

Equities transactions on the Nigerian Stock Exchange ( NSE), sustained sliding profile yesterday, as profit- taking took a toll, resulting to a further dip in the All Share Index ( ASI) by 0.13 per cent.

The ASI decreased by 32.37 absolute points or 0.13 per cent to close at 25,182.67 points. Similarly, the overall market capitalisation lost N17million to close at N13.137trillion.

The downtrend was impacted by losses recorded in large and medium capitalised stocks, amongst which were; Julius Berger, Nigerian Breweries, UAC of Nigeria ( UACN), Lafarge Africa, and Caverton Offshore Support Group.

Analysts noted that the market sustained Wednesday’s decline on profit- taking in stocks that have gained over time.

The Chief Operating Officer Investdata Consulting Limited, Ambrose Omordion, said the mixed trend is likely to continue, but however added that the current undervalued state of the market offers opportunities to position for the short, medium and long- term.

“This is why in vestors should target fundamentally - sound, and dividend- paying stocks for possible capital appreciation going forward.”

The market breadth closed slight negative, recording 16 gainers against 17 losers. Neimeth International Pharmaceuticals recorded the highest price gain of 9.83 per cent to close at N2.57 per share.

Unity Bank followed with 9.62 , per cent to close at 57 kobo, while Associated Bus Company rose by 8.89 per cent to close at 49 kobo, per share.

Japaul Oil & Maritime Services gained 8.70 per cent to close at 25 kobo, and Aiico Insurance appreciated 6.31 per cent to close at N1.18, per share.

On the other hand, Caverton Offshore Support Group led the losers’ chart by 10 per cent to close at N2.25 per share. Prestige Assurance followed with 9.09 per cent to close at 70 kobo. Mutual Benefits Assurance lost 8.33 per cent to close at 22 kobo per share.

Oando slipped 7.14 per cent to close at N2.60, and Julius Berger shed 6.59 per cent, to close at N19.85, per share.

However, the total volume traded rose 26.43 per cent to 337.13 million shares worth N3.405billion, traded in 3,880 deals.

Transactions in the shares of Guaranty Trust Bank topped the activity chart with 81.207 million shares valued at N2.02billion. Mutual Benefits Assurance followed with 44.835 million shares worth N10.117million, while FBN Holdings traded 25.057 million shares valued at N134.087million.

FCMB Groups traded 15.543 million shares valued at N26.742million, while Caverton Offshore Support Group transacted 14.071 million shares worth N33.883million.

Business Overview

is very useful in our daily lives as a personal care product, and almost inevitablly in every household and corporation.

The soap industry falls under the fast- moving consumer goods ( FMCG) sector, which represents one of the largest industries worldwide. It is mainly characterized by companies that supply low- cost products that are in constant high demand, even more so, with the outbreak of the novel coronavirus ( COVID- 19. According to a research report, aggregate output from local soap industry is about 650,000 tonnes per annum. With the ban on soap importation, this translates into a demand and supply gap of more than 250,000 tonnes yearly.

Market prospects

The soap market in Nigeria is estimated to be about N18billion, and it is estimated that over 800,000 tonnes of toilet and laundry soap are produced yearly ( NBS). This is based on a conservative estimate of weekly consumption of one tablet of 75g per person of laundry and bath soap. This demand is driven by population growth, disposable income and consumer trend. With Nigeria’s population of over 200 million coupled with projected growth rate of 10%, translates into ever- increasing demand for soap daily, and a must- use in every home. We expect the manufacturing sector to benefit immensely from the on- going switch to locallymanufactured goods, and incentives by the Central Bank of Nigeria ( CBN) for Small and Medium Enterprises ( SMES).

Raw Materials

Soap is a traditional washing compound made from the saponification of oil fats and caustic alkali. The two vital raw materials needed for the production of bar soap are palm oil and caustic soda. Consequently their importance in the production of cleaning agents cannot be over emphasized.

Equipment needed

The core machines used for bar soap manufacturing include, oil refinery, boiling pot, amalgamator plodder/ extruder cutler eyelet, and sealing machines.

Production process

The production process follows the sequence below:

Bleaching - the process of refining the palm to meet production standard. It usually takes one hour duration per batch. Saponification - mixture of the refined palm oil with caustic soda and heated to form intermediate products known as soap pellets.

Amalgamator - at this stage, soap pellets are combined with fragrances and other materials, which are blended homogenously in the amalgamator. This process takes about 45 minutes for the substance to generate the desired output. Extruder - the resultant mass from the amalgamator is then passed through an extruder, which brings out long log soaps.

Eyelet - will determine the shapes of the bar soaps. Cutting - at the stage, the soap are ready to be cut into different sizes as specified by the company.

Sealing & packaging - is the final stage in the process. The finished products are packed in cartons, sealed and moved to the warehouse for storage and dispatch.

Distribution/ marketing

The envisaged factory can make products available to customers through distributors in major market places. Also the use of sales representatives/ marketing is imperative. Furthermore advertising will play a major role in consumer awareness of the products.

Promoter’s qualifications

The promoter( s) should be experienced in Industrial Chemistry, management and supervisory skills.

Manpower requirement

A total of 10 staff is required in the short- term operations of the plant. They are Skilled Worker - 4; factory workers – 5; and Security Operative - 1 Estimated start- Up Cost: N13.5million for a reasonable output capacity

Potential net profit: N4.5 N5million per annum

Source of Funding: Bank of Industry loan

This profile, or any similar one, can be developed into a bankable proposal for any interested investor. For further clarification, do contact our offices. -