ABSTRACT
The main objective of this study was to show the effect of economic empowerment on the entrepreneurship growth in Abia State. The specific objectives of the study were to: analyze the effect of empowerment in skills on entrepreneurial competency of the agro-based entrepreneurs in Abia State; ascertain the effect of empowerment in capital/finance on entrepreneurial capacity of the agro-based entrepreneurs; determine the effect of technological empowerment on entrepreneurial capability of the agro-based entrepreneurs; and to analyze the effect of academic empowerment on entrepreneurial capacity of the agro-based entrepreneurs. The study adopted a survey research method. The population of this study was made up of the management staff of the selected firms in Aba metropolis and was 931. The Taro Yahmane formula for sample size determination was used to select a sample size of 280 respondents for the study. The data collected for the study were analyzed based on the stated objectives of the study using statistical data entry form designed in Statistical Package for Social Sciences (SPSS) software. Findings revealed that skills empowerment was found to exert significant effect on entrepreneurial competency of the agro-based entrepreneurs in Abia State. This implies that the higher entrepreneurs are empowered with skills, the higher their entrepreneurial competency in Abia State. Also, financial empowerment was found to exert significant effect on entrepreneurial capacity of the agro-based entrepreneurs in Abia State. This indicates that the higher the application of financial empowerment, the higher the entrepreneurial capacity of the agro-based entrepreneurs in Abia State. It was also revealed in the study that technological empowerment was found in the study to exert significant and positive effect on entrepreneurial capability of the agro-based entrepreneurs in Abia State. The study recommended that government’s empowerment programmes should be restructured, or re-designed, and should be centred on the “participatory approach”. This approach emphasizes the importance of involving the beneficiaries in all stages of the programme. There should be greater investment on the human capital investment of youths. This implies that improvement in education, health and nutrition, employment opportunities, shelter and social services, directly address the most important problem of poverty and reduces crime among the youth.
TABLE
OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table
of Contents vi
Abstract vii
CHAPTER 1: INTRODUCTION
1.1 Background of the study 1
1.2
Statement of the Problem 5
1.3
Objectives of the Study 6
1.4
Research Questions 7
1.5
Statement of Hypothesis 7
1.6
Significance of the Study 8
1.7 Scope of the Study 9
1.8 Limitations of the Study 9
1.9
Profiles of the Firms Under Study 10
1.9.1 Valleumbra
Flour Mills Ltd 10
1.9.2 Livestock feeds
limited, Aba 12
1.9.3 PZ
Wilmar 15
1.10
Operational Definition of Terms 17
CHAPTER 2: REVIEW OF RELATED STUDY
2.1 Conceptual Framework 18
2.1.1 The concept of entrepreneurship 18
2.1.2
The entrepreneur 20
2.1.3 The concept of empowerment 22
2.1.4
Entrepreneurship and economic development 26
2.1.5 Entrepreneurial capacity 35
2.1.6 Entrepreneurial competence
development 37
2.1.7
Economic empowerment and SMEs success in Nigeria 40
2.1.8
Economic factors affecting agro-based SMEs in Nigeria 41
2.2 Theoretical Framework 43
2.2.1
Marshall’s approach to entrepreneurship (Marshall, 1949) 43
2.2.2 Kirzner's "alert" entrepreneur
(Kirzner, 1997) 43
2.2.3
Schumpeter (1999): the discovery and opportunity theory of 45
entrepreneurship (equilibrium
destruction theory)
2.2.4 Knight’s Approach (Knight, 1971) 46
2.3 Empirical Review 46
2.4 Summary of Literature Review 49
2.5 Gap in Literature 50
CHAPTER 3: METHODOLOGY
3.1 Research Design 52
3.2 Sources of Data 52
3.3 Population of the Study 53
3.4
Sample size Determination 53
3.5 Sampling Procedure 54
3.6 Description
of the Instrument 54
3.7. Validity of Instrument 55
3.8
Reliability of the Instrument 55
3.9 Method of Data Analysis 55
3.10 Model Specification 55
CHAPTER
4: RESULTS AND DISCUSSIONS
4.1
Data Presentation, Analysis and
Interpretation 57
4.1.1. Questionnaire
distribution 57
4.2
Test of Hypotheses 62
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1
Summary of Findings 67
5.2 Conclusion 68
5.3 Recommendations 69
5.3
Areas for Further Studies 70
References 72
Appendices 79
LIST
OF TABLES
Page
3.1 Population distribution for the number of staff of the 3 selected
firms in Aba, Abia State 53
4.1. Distribution and return of questionnaire 57
4.2. Frequency
distribution showing responses on the forms
of
economic empowerment 57
4.3. Descriptive
statistics showing responses on the extent to
which
economic empowerment boosts entrepreneurial competency 58
4.4. Descriptive
statistics showing responses on the extent to economic
empowerment increases entrepreneurial
capacity 59
4.5. Descriptive
statistics showing responses on the extent to
which
economic empowerment increases entrepreneurial capability 59
4.6. Descriptive statistics showing responses on
the extent to which
empowerment in skills affect entrepreneurial
competency 60
4.7. Descriptive statistics showing responses on
the extent to which
empowerment in capital/finance affect
entrepreneurial capacity 60
4.8. Descriptive statistics showing responses on
the extent to which
technological empowerment increase
entrepreneurial capability 61
4.9. Descriptive statistics showing responses on
the extent to
which academic empowerment increase
entrepreneurial capacity 61
4.10.
Simple regression analysis showing the effect of empowerment
in skills on entrepreneurial
competency of the agro-based
entrepreneurs in Abia State 62
4.12.
Simple regression analysis showing the effect of empowerment in
capital/finance on entrepreneurial capacity
of the agro-based
entrepreneurs in Abia State 63
4.13.
Simple regression analysis showing the effect of
technological
empowerment on
entrepreneurial capability of the agro-based
entrepreneurs in
Abia State 64
4.14:
Simple regression analysis showing the effect of
academic
empowerment on
entrepreneurial capacity of the agro-based
entrepreneurs in
Abia State 66
CHAPTER
1
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Millions
new enterprises start each year despite more than a 50% failure rate.
Consumers, business people, and government officials take an interest in this
activity. This interest is evidenced in the increasing research on the subject,
the increased number of courses on entrepreneurship and the increased coverage
by the media.
Starting
and managing a new agro-based firm involves considerable risk and effort to
overcome all the inertia against creating something new. In creating and
helping a new venture to grow, the entrepreneur has all the responsibility for
its development, growth and survival, as well as corresponding risk and
rewards, and thus, the function of economic empowerment for such entrepreneur
becomes important.
Entrepreneurship
in Nigeria started when people in the villages and farming communities produced
more products than they needed, as such; they had to exchange these surpluses
with those who needed them within their immediate and neighbouring communities.
The exchange of goods for goods or services was based on trade by barter
initially, until commodity money was developed and used. Exchange encouraged
specialisation among producers, and the communities came to realize that they
can concentrate on the areas of production they are best fitted. Consequently
on the above, the culture of entrepreneurship started in Nigeria (Raimi and
Towobola, 2011).
The
role of economic empowerment on the sustainable growth of their enterprise is
difficult to accurately measure or estimate, but it is believed to be highly
dynamic and significant (Chu, 2010). Among others, Nigeria, one of the major
oil producing countries in the world was recent classified to be one of the
poorest countries. World Bank (2000) stated that the poverty has increased
dramatically with 65% of the population living below the poverty line as
against 43% in 1992. It has been observed that there is no country in Africa
whose deterioration in socio-economic status has been as severe as that of
Nigeria, to the extent that within the last five years, half of the population
is living below the poverty line (World Bank, 2000). The socio-economic status
of the citizens has considerably affected the development and improvement of
certain sectors. Recent times have witnessed a number of strategies, and
activities like sharply expanded programmes, techniques and innovations in
agricultural programmes in Nigeria in order to address the deteriorating
socio-economic situation. Universities, research institutes and private sector
organizations are the most important institutions involved in the technical entrepreneurship,
which is one of the major sources of wealth, power and employment in developed
countries. Unfortunately, the absence of viable industrial and private sector,
the deficiencies of existing infrastructure and dominance of foreign-based multinational
companies tend to have a limiting effect on the capacity to create, foster and
nurture indigenous enterprises in Nigeria. Identifying and supporting the
activities of potential and existing entrepreneurs has become a major concern
for an increasing number of governments in developed and developing countries.
Public policies are designed in developing countries to increase the pool of
entrepreneurs and to promote the formation of certain types of business at the
micro and small-scale levels which foster technological activities (Litvak,
2002).
The governments in most developing
countries such as Nigeria were criticized for paying inadequate attention to
the need for accelerated economic growth and for not harnessing the abilities
of their own citizens for technological innovations and entrepreneurship
(Anamekwe, 2001). Critic concluded that these developing countries depend on
exogenous technologies that are inappropriate for their environment. This has
been responsible for Nigeria’s exports which have largely been based on raw
materials and semi-manufactured goods with the petroleum sector as the most
important. Less than 5% of these exports are on the average attached to
knowledge intensive goods and services (Akeredolu-Ale, 1975). These problems became
acute in the 1980’s and early 1990’s, when Nigeria experienced stagnating
industrial output and decreasing crude oil prices while industrialization
through the production of indigenous technological development became central
topics in the industrial policy debates. This view was subsequently enunciated
in the various development plans, national budgets, and rolling plans and in
the current reform programmes elaborated in the National Economic Empowerment
and Development Strategy (NEEDS) (Sule, 1986). The central theme of the policy
has been that small industries should spearhead the nations drive towards
economic recovery. Studies have shown that small-scale industries in many
countries provide the mechanism for promoting indigenous entrepreneurship, enhancing
greater opportunities per unit of capital invested and aiding the development
of local technology (Nils-Henrik and Morch, 1995). Recent work summarized in
the background paper on small-scale industries has shown that small-scale
forest-based processing enterprises form a very large part of the overall
forest products processing total in employment terms (FAO, 1995).
In Nigeria, small-scale businesses
represent about 90% of the industrial sector in terms of the number of
enterprises. They also account for 70% of national industrial employment if the
threshold is set at 10-50 employees, contribute 10% of manufacturing output and
a meager 1% of gross domestic product (GDP) in 2001 (Ajayi, 2002). Similarly,
they have also contributed significantly to economic development through
employment, job creation and sustainable livelihood (Nigeria Investment
Promotion Commission, 2003).
In spite of the major role, the
significance and contributions of the small-scale enterprises to the national
economy, this set of enterprises are still battling with many problems and
certain constraints that exist in promoting their development and growth. For
instance, (International Labour Organization, 1994) study shows that inadequate
entrepreneurial talent affects the development of small-scale manufacturing and
processing industries. While large-scale industries are established with
expatriate capital, small-scale industries need to have a domestic
entrepreneurial and industrial base. Other problems that hinder the advancement
of small-scale enterprises are the persistent low level of technology, the
shortage inadequate entrepreneurial skills of operators and the absence of an
effective management technique. Discussion of a change in the level of
technology and its impact on the Nigerian industries has focused on large firms
(i.e capital-intensive, high technology sectors). Focus on this change in the
small-scale firms is relatively little. Small-scale enterprises tend to
concentrate on traditional industries where low entry barriers, low minimum
production scales, and relatively large labour force are the potential
advantages.
However, the traditional industries
have not been immune to the recent technological revolution taking place in the
field (Adubifa, 1990). Hanshom (1992) and McCormick (1998) stated that African
small enterprises are found to be unorganized in production activities. Low
capital investment on capital goods and lack of division of labour in
production makes these enterprises remained week. It is a clear fact that many
micro, small and medium-scale enterprises are dying out owing to lack of
financial support from the government and other citizens. Mills (1990) stated
that the major pre-occupation of all developing countries these days is simply
how to improve social, economic and political status of the people. According
to Uma (2004), it involves the improvement of the living standards of the mass
of the low income population and making the process self-sustaining. Improving
the living standard of the people involves the setting of priorities in the
mobilization and the use of resources available. In some rural areas, the
working and living conditions of women for instance, have not been able to be
ameliorated by many recent programmes designed to improve their economic
status. Many writers have pointed out the detrimental effects on women of
technological and socio-economic changes in the process of development (Palmer,
1978; Whitehead 1985; Stevens 1985). There has not been a total consideration
and enough provisions for some rural entrepreneurs in the development process.
Many of these entrepreneurs are left out in the provisions of the government
toward the advancement of their enterprises.
The present economic crisis in
Nigeria has brought about an ironic change – an increased demand for locally
produced goods. For example, aso oke (a type of traditional dress woven
in the cottage industry) is now popular at social gatherings and in the fashion
houses. Because refrigerators have become unaffordable, rural dwellers are
stuck with locally produced “water pots” which are noted for their cooling
effects on drinking water. Also, many Nigerians have now resorted to using
locally produced soap (ose dudu, i.e black soap). Yet, the people
producing these goods are constrained by their lack of access to critical
resources (capital, labour, land, infrastructures, and improved technology).
Who wants to accept all the risks and
efforts involved in creating a new agro-based venture? The person may be a man
or woman, come from an upper-class or a lower-class background, have a college
or a university Degree or be a high school dropout. The person may have been a
student, a teacher, an engineer, a salesperson, a manager, a retired person,
etc.
This research work “The impact of
socio-economic background on entrepreneurial capacity” therefore investigated
certain demographic variables of entrepreneurs influence their operations.
1.2 STATEMENT OF THE
PROBLEM
Nigerian
Entrepreneurs face many challenges. The future appears very bleak. Very few
research results are available on youth attitudes toward entrepreneurship. More
information is required for the development of suitable interventions to
improve the employability of the youth exiting from higher institutions and
other levels. The problem statement central to this study is the expectation
that exposure to entrepreneurship will influence young people attitudes towards
entrepreneurship as a career choice and subsequently their plans for the
future.
Entrepreneurial capacity
in any particular economy is affected by many personal and environmental
forces. Lack of quality education in Nigeria has terribly hindered the
advancement of entrepreneurship in Nigeria. The right education equips the
entrepreneurs with the requisite skill to develop and run a successful business
enterprise.
There is also the problem
of capital. Many Entrepreneurs fund their business through their personal funds
especially the new ones as bank loans and finance in Nigeria is difficult to
obtain. Most times, the interest rate on bank loans becomes too astronomical
for the capital to be repaid.
The deplorable state of
Nigeria’s infrastructure system is another problem facing the development and
growth/success of many Entrepreneurs in Nigeria. There are no good roads for
easy access to markets; the power system is better imagined than seen. One has
to be ready to supply power to his venture if you decide to run a business. The
effort of the government to provide adequate electricity to entrepreneurs has often
been sabotaged.
Lack of the requisite
entrepreneurial skills on the side of most Nigerian entrepreneurs is also one
of the challenges that they face. Entrepreneurship involves starting and
running a business. Such activity cannot be progressive without the right
skills. It therefore becomes necessary for Entrepreneurs to be empowered so as
to handle the challenges posed by the environment of agro based businesses in
Abia State.
1.3 OBJECTIVES OF THE
STUDY
The main objective of this study was
to show the effect of economic empowerment on the entrepreneurship growth in
Abia State.
The specific objectives of the study
were to:
i.
analyze the effect of
empowerment in skills on entrepreneurial competency of the agro-based entrepreneurs
in Abia State;
ii.
ascertain the effect of
empowerment in capital/finance on entrepreneurial capacity of the agro-based
entrepreneurs;
iii.
determine the
effect of technological empowerment on entrepreneurial capability of the
agro-based entrepreneurs;
iv.
analyze the effect
of academic empowerment on entrepreneurial capacity of the agro-based
entrepreneurs.
1.4 RESEARCH QUESTIONS
In order to achieve the above aims
and objectives of this research work, relevant questions were asked and
answered. These include;
i.
What is the effect of
empowerment in skills on entrepreneurial competency of the agro-based entrepreneurs
in Abia State?
ii.
What is the effect of
empowerment in capital/finance on entrepreneurial capacity of the agro-based
entrepreneurs?
iii.
What is the
effect of technological empowerment on entrepreneurial capability of the
agro-based entrepreneurs?
iv.
What is the
effect of academic empowerment on entrepreneurial capacity of the agro-based
entrepreneurs?
1.5 STATEMENT OF
HYPOTHESIS
In order to arrive at statistical
conclusion on the issue at stake, the following hypotheses were tested;
HO1: Empowerment in skills
does not have any significant effect on entrepreneurial competency of the
agro-based entrepreneurs in Abia State;
HO2: Empowerment in
capital/finance does not have any significant effect on entrepreneurial
capacity of the agro-based entrepreneurs
HO3: Technological
empowerment does not have any significant effect on entrepreneurial capability
of the agro-based entrepreneurs
HO4: Academic
empowerment does not have significant effect on entrepreneurial capacity of the
agro-based entrepreneurs.
1.6 SIGNIFICANCE OF THE
STUDY
Because of the importance
of entrepreneurship to the growth of an economy, this study intends to uncover
some problems faced by Nigerian entrepreneurship and the factors contributing
to their success. Results from this study hopefully can provide helpful information
to policy decision-makers in creating an environment conclusive to the
development of the agribusiness sector. Policy
makers will through the result of the study develop a guide on the right
policies that will help promote entrepreneurial development and performance of
agro based firms, particularly for the SMEs.
Many entrepreneurs in Nigeria which
are desirous of expanding their entrepreneurial capacities will also through
this study know the various ways they can be empowered by the government and
how they can overcome challenging barriers which they will encounter in
entrepreneurship.
The result will form a
commendable attempt to make visible the various economic empowerment options
available to potential entrepreneurs in Abia State and beyond. Some common
errors that have made many new businesses a failure will also be revealed by
the study.
It will serve as a good
reference point for future researchers in this interesting and challenging area
of study.
1.7 SCOPE OF
THE STUDY
This research work was on the effect
of economic empowerment on the entrepreneurship growth in Abia State. The study
was an attempt to reveal how economic empowerment can affect the growth of manufacturing
firms in the State. Geographically, the research work was initially aimed at
covering as many indigenous manufacturing industries as there are in Abia
State. However, as a result of time, resources and/or finance that usually
militates against such an elaborate study, the researcher narrowed down the
study area and concentrate on only three (3) manufacturing firms in Aba. These
firms were selected based on their large involvement in the use of agro-based
products/materials as well as their nearness to the researcher. The firms were Livestock Feeds Limited, Aba, and Valleumbra Flour Mills Ltd.
The researcher believes that the
information obtained from these firms will have much relevance to other
agro-based firms in Abia State of Nigeria.
1.8
LIMITATIONS OF THE STUDY
This study focused on the effect of
economic empowerment on the entrepreneurship growth in Abia State. A research
work of this magnitude should cover as many agro-based firms as there are in
Abia State. However, as a result of the inherent difficulty mostly resources
and time in carrying out such a wide survey, the researcher narrowed down to
concentrate on three (3) agro-based firms in the industrial city of Aba, Abia
State. It is the belief of the researcher that the information obtained from
these firms will have much relevance to other agro-based firms in Abia State of
Nigeria and beyond, although there might be slight differences.
Having mentioned the limiting factors
of time and finance, it is also necessary to reveal here that attitude of most
of the studied entrepreneurs toward the release of vital information was
skeptical. Perhaps, this was out of fear that such information may get into the
hands of their competitors. Such uncooperative, lukewarm and often repulsive
attitude imposed some limitations to this study. However, these constraints do
not in any way invalidate the findings of this study.
1.9 PROFILES OF THE FIRMS UNDER STUDY
1.9.1 Valleumbra Flour
Mills Ltd
Valleumbra Flour Mills Nigeria
Limited is an indigenous manufacturing firm involved in the processing of Agro
allied products. It is located at KM 2 Aba/Enugu Expressway Aba, Abia State,
Nigeria. The company has diversified into this sector of the economy in line
with the Federal Government of Nigerian’s economic policy to invest in
Agricultural related ventures to boost local food production.
Company’s principal
activities
Valleumbra Flour Mills is engaged in
the production of:
- Wheat flour
- Wheat semolina
- Spaghetti
- Macaroni
- Bran
Company strategy
- To pursue profitable growth in all
areas of our activities.
- To defend company’s traditional
business.
- To transform organizational
facilities, systems and services for the 21st century challenges.
- To create long-term partnership
with customers
Valleumbra Flour Mills Nigeria
Limited has a policy thrust to defend organizational
tradition through:
- Improved services.
- Expansion of operations
- Costs reduction and improvement of
margins
- Creative marketing
- Sound practice of customer
relationship management
About the company’s
products
All products are produced to meet
international standards and requirements of regulating agencies. The short
(Macaroni) pasta comes in different packages and shapes, with the possibility
of new variants as the consumer needs and wants demand in the market.
The company’s range of products
includes:
- Valleumbra
Flour
- Valleumbra
Semolina
- Valleumbra
spaghetti
- Valleumbra short pasta
- Valleumbra wheat offal (Bran)
- Anzy Spaghetti
- Anzy Macaroni
Company’s vision
“We aspire to be a prominent player
in the agro allied industry in Nigeria and beyond”.
Company’s mission
“To produce and market superior
quality agro allied products with latest technologies, investing in our people
and environment, and providing attractive returns to all stakeholders as a
responsible corporate citizen”.
Company’s value
“We value and respect our people,
customers, shareholders, ethical standards, technology and environment because
they are our partners in business”.
1.9.2 Livestock feeds limited, Aba
Livestock Feeds Limited,
Aba is located at 12, Industrial Layout, Aba, Abia State. Livestock Feeds was
established in 1963 by Pfizer as a subsidiary to the pharmaceutical business
which had been introduced to Nigeria few years earlier. Following importation
of exotic milking cows and hybrid chickens into the country by the Germans,
Dutch and later Americans, the need to provide health and nutritional products
led to the creation of the Animal Health Division and then the Feed Division.
Pfizer held 80% equity shareholding while a few Nigerians had the balance of
20%.
The first Mill with a
capacity of 5MT/hr was installed at Ikeja in 1963, followed by Aba in 1964 and
Kaduna in 1965 with 4MT and 3.5MT per hour capacity respectively. Accelerated
growth in urban and sub-urban population as well as increased demand for
poultry and eggs impacted positively on the feed business, leading to the
Company’s phenomenal growth. With installed capacity of 40MT/hr single shift
and network of 12 franchise millers, Livestock Feeds was the dominant brand and
benchmark in the industry. At the peak of its growth, the Company had 55% of
the market share.
On introduction of the
Indigenization decree, Pfizer was compelled to divest 20% of its shareholding
to Nigerians, thus reducing its stake to 60%. The Company’s shares were
subsequently listed on The Exchange in 1973. Between 1996 and 1997, Pfizer
divested its interest in Livestock Feeds which was acquired by Adset Limited
through a Management Buy-Out. Faced with significant financing needs, the new
owners resorted to high cost short-term borrowings to fund both working and
capital expenditure. This resulted in a funding mismatch that impaired the
Company’s cash flows and debt service capabilities. The Company subsequently saw
its market share down to less than 5% in 2005. With debt of over ₦1.3 billion
owed to banks and other creditors and accumulated losses in excess of ₦1
billion, the Company was essentially insolvent.
After many previous
unsuccessful attempts to get a core investor revamp the Company, First Capital
Trust Plc was engaged as turn-around managers in 2005. With a bridge finance
facility of ₦300 million and the dexterity of the turn-around managers, the
Company was able to negotiate a debt relief in excess of ₦800 million, which
paved way for Livestock Feeds eventual restructuring. Thereafter, a successful
Rights Issue of ₦300 million was floated in 2007 resulting in change of
ownership structure as First Capital Trust Plc replaced Adset Limited as the
core investor in the newly invigorated Company. The proceeds of the Issue were
used to pay off the bridge finance as well as provide working capital for the
Company.
The intention of the
management was to put the Company on a sound footing to enhance access to more funds
from the capital market to rehabilitate aged machines and other critical
infrastructures. This plan was however truncated due to the global economic
meltdown of 2008 and its attendant negative effect on the Nigerian capital
market. Management was thus forced to suspend most of the plans for aggressive
growth and expansion of the Company and concentrate on steadily regaining the
lost market share with the limited funding the Company was able to obtain from
banks. In order to achieve this objective, some minor capacity expansion
programs were carried out. A second manual Mill was fabricated for the Ikeja
Mill while the mothballed Kaduna Mill was rehabilitated and reopened. Funding
from the commercial banks was however expensive and led to reduced margins
until the introduction of the Commercial Agriculture Credit Scheme by the
Federal Government in 2010.
At the Company’s 2008
Annual General Meeting, the Board was authorized by its shareholders to raise
additional capital from the capital market in order to further improve cash
flow and liquidity position as well as continue with the replacement of our
ageing plants and machinery. The prevailing loss of investors' confidence
following the 2008 stock market crash prevented the Company from approaching
the primary market to raise the much needed funds.
The Board however
considered the urgent need to inject additional capital into the Company and
thus explored multiple options for raising the required capital. UACN was
identified as a potential investor, and expressed its intention to acquire 51%
of the Company’s issued and fully paid up shares. A special placing of
800,000,000 ordinary shares of 50 kobo each at an Issue price of ₦1.13 was
approved and issued to UACN on July 27, 2012 which was paid for by UACN;
representing 40% of the Company’s authorized share capital. UACN then acquired
additional shares from other shareholders to bring its total shareholding to
51%. The acquisition by UACN provided funding for working capital, technical,
managerial and financial support to the Company. The flagship Mill, the Ikeja
Mill, which was aged, was replaced in 2014 with a new 12MT/hr Mill to provide
more production capacity.
Products of
the company
Livestock Feeds is
engaged in the business of Feeds Milling and it has been an excellent caterer
for all species of animals; providing nutritious and balanced portions for
animal production since 1963. The flagship brand of the Company is Livestock
Feeds while its nascent brand is Aquamax Fish Feed.
The Company has two broad
product categories of Livestock Feeds: Poultry (Finished Feeds and
Concentrates) and Fish.
a) Poultry
i) Finished feeds
ii) Concentrates –
Livestock Feeds has developed a wide range of protein based concentrates with
proper mixing instructions to yield an equivalent of its finished feeds at a
lower cost.
b) Fish -
Aquamax
Livestock Feeds is set to
grow its revenue base substantially by consolidating the marketing presence of
its Fish Feed brand; Aquamax which was officially introduced to the market by
the end of 2014. The Company is positioned to leverage on opportunities that
exist in the aquaculture sub-sector of the economy
1.9.3 PZ
Wilmar
PZ Wilmar formed in December 2010, is a
joint venture between PZ Cussons, an international consumer products
group headquartered in the UK with operations in Africa, Asia, the Middle East
and Europe and Wilmar International Limited founded in 1991 and headquartered
in Singapore and is Asia’s leading agribusiness group. In
2011, the PZ Wilmar joint venture was formed with the ambition to establish a
food ingredients consumer brand. Together with the partner
Wilmar International Ltd, the company have developed a new range of edible cooking
oils - Mamador, providing great quality, healthy cooking oil for Nigerian
families, refined locally in their new world class Palm Oil
refinery in Lagos. Their jointly owned palm oil plantations in Nigeria are aiming
to ensure ongoing oil supply and to support investment in the local Nigerian
palm oil industry.
Product range
Mamador
is superior quality 100% pure, vegetable oil from PZ Wilmar. The company has
taken care to ensure that every single stage of our production
process, from selection through to new tamper proof packaging, is to unrivaled
quality standards. Their brand is all about new, world class production
standards, delivering superior quality, purity, and taste.
Mamador edible oil, from PZ Wilmar is a $64M investment into the edible oils
market in Nigeria. They are investing in plantations on a vast scale, building
a new world class refinery, training staff on new quality
standards and supporting education in communities where they operate.
The
company’s investments in oil palm plantations and associated infrastructures
currently stand at about N45 billion (approximately $150 million). These
include a processing plant at Calaro Estate in Akamkpa Local
Government Area in Cross River State. The estate consists a 45 tonne per hour
palm oil mill (POM) and a 2.5 tonne per hour kernel crushing plant (KCP).
Its
Chief Executive Officer, Christos Giannopoulos, said the POM basically converts
fresh fruit bunches (FFB) into palm oil. This process involves extracting red palm
oil from the fleshy outer mesocarp of the palm fruit. The product is known as
Crude Palm Oil (CPO), similar to the red palm oil that is sold in the local
market. The KCP, on the other hand, extracts palm kernel oil (PKO) from the
palm kernels. The company’s palm oil mill at Ibad Oil Palm Estate in Cross
River has the capacity of 20 tonnes per hour in terms of FFB processing. He
said the company has invested around N20 billion in an oil palm refinery in
Ikorodu, Lagos State.
To
the company, Nigeria has the biggest market in Africa and is the largest
consumer of the palm oil in the region. Currently, there is a massive gap
between demand and supply. Estimates of this deficit are around 600,000 to
700,000 tonnes per annum. Last year, he added that the company launched its
Pilot Out growers Scheme. The goal is to support local farmers to develop
viable and sustainable oil palm businesses.
As
part of the programme, the company makes available, high quality seedlings for
farmers, training them on Best Management Practices (BMPs) to optimise their
yields. For stakeholders, while there are significant efforts to reduce the gap
between demand and supply of palm oil in Nigeria, there is massive smuggling of
palm oil across the borders to the tune of 400,000 tons per annum due to which
the federal government loses millions of dollars in revenue from duty and tax collection..
1.10 OPERATIONAL DEFINITION OF TERMS
Empowerment:
is a process of change that focuses on expanding the range of choices that
people can make. It is also the process through which individuals and
communities achieve autonomy, insisting on the building of self-reliance,
self-confidence, organizations, and social alliances. It further involves both
the growth of individual opportunity as well as the removal of external
constraints on seizing opportunity.
Entrepreneur:
is one who brings other people together in order to build a single productive
organization. He is also one who organizes, manages and assumes the risks of a
business enterprise.
Economic
empowerment: is the ability to make and act on
decisions that involve the control over and allocation of financial resources
(Golla, et. al, 2011).
Technological
empowerment: is the strengthening our scientific
knowledge in order for us to learn how to apply those technology-related
information at certain points in our lives.
Entrepreneurial
competencies: means underlying characteristics
possessed by a person, which result in new venture creation. These
characteristics include generic and scientific knowledge, motives, traits, self
images, social roles, and skills that may or may not be known to the person.
Entrepreneurial
capacity: is the capacity and willingness to
develop, organize and manage a business venture along with any of its risks in
order to make a profit.
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