The value of companies listed under the Industrial Goods sector of the Nigerian Stock Exchange (NSE) rose to N4 trillion in eight months.
Industrial Goods sector comprises companies primarily involved in the manufacturing and distribution of capital goods, including aerospace and defense, engineering and building products, electrical equipment, industrial machinery, and packaging products for industrial and consumer products. Their businesses are dominated by the production of goods for commercial use. Companies in this sector are either listed on the main board or premium board.
On the premium board, Dangote Cement and Lafarge Africa are listed there, while Notore Chemical Industries, Berger Paints Nigeria, BUA Cement, Chemical and Allied Products (CAP), Meyer Plc, Portland Paints and Products Nigeria, Austin Laz & Company, Cutix, Beta Glass and Grief Nigeria.
Market capitalisation went up to N4 trillion, following the listing of BUA Cement into the Main Board.
Market capitalisation of industrial goods on the main board went up by N1.116 trillion to N1.509 trillion on August 31, 2020 from N392.506 billion to open for the year.
Meanwhile, the sector on the premium board declined by N175 million to close at N2.491 trillion on August 31, 2020 from N2.666 trillion on January 2, 2020.
Also, the subsector index, which is NSE Industrial Goods index recorded year-to-date growth of 4.06 per cent as at August 28, 2020.
In January 2020, BUA Cement Plc listed its shares on the NSE to become the third-largest quoted company in the country, adding N1.18 trillion shares to the bourse. The Company is a product of a merger between the Cement Company of Northern Nigeria (CCNN) and OBU Cement.
Financial analysts noted that the Industrial Goods sector is among the hardest hit by the economic crisis brought about by the COVID-19 pandemic.
According to the official data by the NBS, economic activities in Nigeria in second quarter (Q2), 2020 contracted by -6.10 per cent, owing mainly to the complete shutdown of movement and business activities in major economic hubs (Lagos, Ogun, FCT, Kano, and Rivers) between April and May 2020 in an attempt to tame the spread of the Coronavirus pandemic by the government.
The manufacturing sector remains a critical segment and plays an integral role in the development and advancement of the Nigerian economy and the sector has contributed significantly to the nation’s economic diversification strategy.
The chief operating officer of InvestData Consulting Limited said that the outbreak and spread of the coronavirus (COVID-19) has severely impacted the world economy with many industries suffering.
He noted that the fragility of household wallets has been laid bare, with statistics now pointing to even weaker consumer sentiments, saying that the knock-on effect of fading demand and weaker oil prices are also stifling earnings of consumer goods companies and the stock market has responded sharply to these challenges by marking these companies down.
In a report by United Capital Plc on ‘Nigeria Cement Sector in H2, 2020’ expected the cement industry to be on the path of growth, this growth was to be fueled by huge deficit in the infrastructure space across the continent, renewed commitment of the Federal Government of Nigeria (FGN) to invest heavily in transport (including road, rail, and ports) and housing infrastructure, and coupled with low cement consumption per capita in Nigeria which stands at 150kg compared to global average of 561kg.
The Investment house said “Despite the disruption in supply chain caused by COVID-19, the players in the cement space shows resilient by producing am impressive topline and bottom line across board.
“Looking ahead, we are optimistic about Nigeria’s cement industry in H2-2020E as we believe that the Economic Sustainability Plan (ESP), if implemented within the time frame stipulated, could raise some hope for the cement industry.
ted to renewing commitment towards the construction and maintenance of federal highways, roads, bridges, and road interventions within federal tertiary institutions across the country.”
Speaking on the results, Group managing director, Dangote Cement Plc, Michel Puchercos, said, “I am humbled by the fact that we continue to be in a strong position despite the economic downturn that the world is facing due to COVID-19.
Although April was greatly impacted by lockdowns and restrictions across our operations, we experienced a strong quarter. We achieved a record high volume and EBITDA margin in Pan-Africa of 4.7Mt and 21.7 per cent respectively. Group EBITDA was up slightly despite the impact of COVID-19.”
He added, “I am particularly pleased to announce that Dangote Cement shipped its first clinker cargo to Senegal from our new cement terminal in Apapa, Lagos. It has been a long journey for Nigeria, from being one of the largest bulk importers of cement, to being self-sufficient in cement production, and now an exporter of clinker.
“We are on track to ensure West and Central Africa are cement and clinker independent, with Nigeria as the main supply hub. We want to continue developing regional and continental trade between the ECOWAS countries and beyond.”