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Chinese, Nigerian firms to invest $40m in tractor assembly plant

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chinko

LAGOS-A Chinese firm, Xiamen XGMA International Trade Company Limited, has entered into partnership with a Nigerian firm, Richbon Group Nigeria Limited, to invest $40 million, about N6.4 billion, to set up a tractor assembling plant in Nigeria. This will lead to the local manufacture of XGMA tractors, heavy duty machineries and equipment.

XGMA, founded in 1951, is a Chinese national large-scale backbone enterprise, which specialises in manufacturing of wheel loaders, excavators, road construction machinery, forklift trucks and mini-machinery. Speaking in an interview announcing the partnership in Lagos, Mr. Sahm Yap, Vice President Xiamen XGMA, said the assembling plant, which will be built in Anambra State, will be used for the manufacture of majority of its earth-moving machineries and will also provide job opportunities for about 5,000 Nigerians when completed.

Yap explained that Nigeria is an important market to XGMA and it is hoping to make it a centre for sales, after-sales, spare parts supply, financing and manufacturing. He further stated that the company is currently in discussion with the relevant authorities and is about getting the necessary clearances for the assembling plant, adding that immediately the necessary approvals are secured, work will commence in earnest on the plant.

He said Xiamen XGMA is one of the major supplier of earth moving tractors and equipment in China and the world and has been eyeing the Nigerian market because of the opportunity it will afford the company to deploy its high quality products in Nigeria, and also look for other investment opportunities, especially in areas related to manufacturing.

He said, “Our machines are of the highest quality and the price is highly affordable, this is what we believe will give us an edge against other competitors in the Nigerian market. “With the partnership with Richbon and when the assembling plant is concluded, our products will be an household name in Nigeria, especially in the area of civil engineering and construction.

“The partnership will create enormous job opportunities for Nigerian and will help attract the much-needed investments into Nigeria.”He said the company is ready to transfer its technology to Nigerians and cooperate with Nigeria in achieving economic development, adding that the memorandum of understanding it signed with Richbon will serve as the starting point towards achieving these goals.

On its partnership with Richbon, Yap disclosed that it took the company a long time before it could get a company to partner in Nigeria, due to its commitment to quality and high standard.

“When we had the opportunity to partner with Richbon, we discovered that we had a lot in common and that our interests match. Since we started the cooperation with Richbon about a year ago, last year, we have seen a very good and long term partner and we believe it will be beneficial not only to both companies, but also to the Nigerian economy.

Also speaking, Mr. Chike Muonagolu, Chairman/Chief Executive officer, Richbon Group, said both XGMA and Richbon have signed an assembling agreement with two vehicle assembly plants in Nigeria, as regards the tractor assembling plant in Nigeria, adding that within the next 18 months, they intend to employ between 1,500 to 2,000 Nigerians in the initial stage of the project.

He expressed optimism that that the partnership will bring about increased patronage of the products by governments at all levels, corporate organisations and individuals. “Knowing that the products one is using is made in Nigeria will endear the products to Nigerians, especially as they will know that they can easily get spare parts, after-sales service among many other benefits,” he said.

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Business

Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies. 

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Yemie ADEOYE

INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.

Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.

Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.

This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.

Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”

Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.

However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.

Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.

In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.

He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”

“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.

“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”

Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.

 

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Banking

CBN Denies Currency Devaluation

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CBN Pegs Interest Rate at 14%

 

The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.

 

Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.

 

However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.

 

In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.

 

However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’

 

“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.

 

“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.

 

He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.

 

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Banking

BREAKING: CBN Increases Interest Rate By 0.5%

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CBN Pegs Interest Rate at 14%

 

The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.

 

The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.

 

Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting,  thereafter.

 

While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

 

In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.

 

Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”

 

Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.

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