By Umar Suleiman
In a move aimed at propelling its growth and market presence, McNichols Consolidated Plc has embarked on a rights issue to raise N265.62 million.
The rights issue, which commenced on August 9, 2023, is scheduled to run until August 31, 2023. The company intends to offer approximately 531.243 million ordinary shares to existing shareholders at a unit price of 50 kobo. This offering will be based on a ratio of 17 ordinary shares for every 23 ordinary shares held as of September 16, 2022.
The primary objective of this capital-raising endeavor is to enhance McNichols’ working capital and support its ambitious expansion initiatives. The raised funds are earmarked for several strategic purposes, including the acquisition of a new cube sugar plant, procurement of packaging equipment to cater to the escalating customer demands, purchase of distribution vehicles, expansion of depots and operating locations, as well as bolstering working capital to drive sales and augment profitability.
According to Olusegun Layode, Chairman of McNichols Consolidated, the company is strategically positioning itself to cater to the burgeoning mass market for food and beverage products. In addition to this, McNichols is capitalizing on unique opportunities in the realms of food supplements and the premium segment of the food and beverage market.
Layode emphasised that Nigeria, with its rapidly growing youthful population constituting more than half of its inhabitants, presents a fertile ground for consumer goods companies. “Our strategy includes aggressive advertising and promotion campaigns, expanding our brand and product lines, and increasing our market share by meeting rising demands,” he stated.
Despite the intense competition in the industry, Layode believes that the sector still holds significant potential for growth and can accommodate new entrants. Success in this sector hinges on factors such as widespread product availability, strong brand recognition, consumer loyalty, a diverse product mix, efficient production processes, and a wide distribution network.
Furthermore, Layode expressed confidence in the business prospects of the sector. He noted that the Nigerian government’s commitment to diversifying the economy will result in increased economic activities within the sector. Additionally, the government’s focus on fiscal responsibility is expected to positively impact the purchasing power of consumers, thereby boosting the fortunes of the consumer goods sector.
McNichols Consolidated Plc, established in April 2005, initially ventured into the processing and packaging of sugar, chocolate powder, cereals, and other food products. The company was successfully listed on the Nigerian Exchange on December 18, 2009, marking a significant milestone in its journey.
With the ongoing rights issue and its strategic growth plans, McNichols Consolidated Plc aims to solidify its position in the market, capitalize on emerging opportunities, and drive its future success.
