Berger Paint eyes improved return on investment in Nigeria
The Chairman of Berger Paint Plc, Mr. Clement Olowoakande, has assured that the company is on the path of reclaiming its position as the dominant paint manufacturer in the country and improved returns on investment after successfully surmounting a number of internal challenges experienced in 2011.
Laying the report and financial account of the company before the shareholders in the 52nd annual general meeting in Lagos, he informed that both volume and turnover as well as profit before and after tax declined, saying that the company experienced several cases of fraud within the year which impacted negatively on the financial performance.
He noted that a forensic audit was appointed to investigate the suspected fraud, adding, “the investigation led to the employees involved being handed over to the Economic and Financial Crimes Commission (EFCC).
“In view of the involvement of several key personnel of the sales department in the fraud cases, the management embarked on a restructuring exercise, which is still on-going and which is ultimately expected to reposition the company on the path of sustainable growth.”
Olowoakande added that the board has since established a Risk Assessment Unit, which implemented a credit control process and Risk Assessment policy for the company, saying that the company has established a zero tolerance for fraud policy which is now in effect.
According to him, the company saw increased prices of raw materials, mainly due to increased oil prices, as well as shortage of some imported raw materials due to increased worldwide demand and reduced production capacity worldwide.
“The tight liquidity prevailing in the Nigerian economy and the high interest rate charged by banks resulted in financial constraint by many property developers as well as individual consumers, which again has had negative effect on our sales,” he informed.
The company achieved a turnover of N2.57 billion in 2011 and profit after tax of N250.19 million, representing 6.61 and 43.45 per cent decline over N2.76 billion and N442.46 million recorded in 201 respectively.
The shareholders at the event approved the distribution of N152.15 million, which amounts to 70 kobo per share dividend for the period, representing the same amount paid in the corresponding period of 2010.