Notore Chemical Industries Plc has commenced the Turn Around Maintenance (TAM) of its plant, which is aimed at returning the facility to its 1,500mertic tonnes per day (MTPD)and 500,000metric tonnes per annum (MTPA) urea production capacity.
In a notification to the Nigerian Stock Exchange (NSE), Notore said the TAM would also increase the reliability index from the current level of 67 percent to 95 percent. Following the drawdown of a N13.32 billion loan facility from the African Export-Import Bank (Afreximbank) for the implementation of the TAM, the company has started ordering all key components for the TAM.
The TAM project would include the procurement of critical spares required to sustain the nameplate capacity of the plant and installation of a back-up power supply to the current gas turbine generator. Upon procurement of all the key components and critical spares required, the objective is to accomplish the maintenance activities within a period of 30 days production,” the company said.
Meanwhile, Notore has recorded a loss after tax of N10.250 billion for the year ended September 30, 2019, compared with a loss of N3.523 billion in 2018.
An analysis of the results showed that revenue stood at N21.419 billion, down from N26.824 billion, while cost of sales rose from N17.217 billion to N17.454 billion in 2019. Gross profit was N3.964 billion down from N9.607 billion. Administrative expenses increased from N6.213 billion to N6.614 billion, while selling and distribution expenses fell from N531 million to N463 million.
Financing cost increased from N12.759 billion to N13.669 billion, making the company to end the year with a loss of N10.250 billion as against N3.523 billion.
The company had explained that its fortunes would improve after its TAM because the Nigerian fertilizer demand is quite robust and is expected to continue to grow due to the federal government’s efforts to increase both the supply and demand for fertilizers, through provision of subsidies, grants and loans and through recent government initiatives such as the Presidential Fertilizer Initiative (PFI).
The company explained that the domestic fertilizer market is yet to reach its full potential as the consumption of fertilizer per hectare of arable land in Nigeria is below 10kg compared to the 200kg recommended by Food & Agriculture Organisation.
“Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and Sahel African states is also quite significant,” it added.