Kayode Tokede

The Group Managing Director, UAC, Mr. Fola Aiyesimoju, yesterday stated that the company has  accelerated its growth momentum with the recent acquisition of CHI.

Aiyesimoju , who was speaking to the capital market community during the  company’s “facts behind the figures”” event on the Nigerian Exchange Limited  (NGX) in Lagos, maintained that   UAC  has bolstered its house of scable quality brands with CHI acquisition.

“With the admission of CHI, we have further accelerated our growth. We have been growing very fast, but we further accelerated our growth when we consolidated the companies. We have gone from  N80 billion company to a N700 billion company in six years, ”he said.  

“So, our core business has been growing and will continue to grow very fast. We have added three new engines. We feel UAC has taken over an effective CHI and it allows us to focus on value creation instead of solving problems,” Aiyesimoju said.

He stated that the risk of CHI acquisition include import-driven foreign exchange risk and inventory management risk.

On the import-driven foreign exchange risk, he disclosed that over 90 per cent of the raw and packaging materials are imported resulting in high demand for dollars, stressing that the management of UAC will  focus on replacement cost pricing and treasury risk management. Longer term focus on developing domestic value chains. No disadvantage relative to other industry players.

On the  inventory management risk, Aiyesimoju stated that there are high levels of inventory (2024FY: 229 days) linked to a meaningful portion of imported raw materials.

To tackle this risk, he said,  “We will leverage insights and experience from our existing operations to optimize high inventory days. Historical levels are considered excessive, our business CAP Plc with similar sourcing characteristics operates with 90 days of inventory.”

He expressed that the management of UAC is aware of the risk and has put in place the risk management framework to deal with it.He said UAC would maintain its growth momentum and remain very hungry and ambitious.

Speaking earlier, the Group Chairman of NGX Group, Dr. Umaru Kwairanga, stated that UAC’s story is the one that  spans over centuries of shaping Nigeria’s commercial industry landscape.

“Since its listing on the  Exchange in 1977, the company has consistently demonstrated resilience, reinvention and strong corporate governance.

“Its footprint across food  &  beverage, paints & animal nutrition, quick service restaurant and statistic making, not just diversifying globally, but business deeply   intertwined with Nigeria’s socio economic growth.

“So, the result of experience, resilience and innovation is seen in brands like MR Biggs, Swan, and  so on. And now,  the one and only CHI that just joined the UAC group.

“The company’s recent acquisition further underscores its ambition to strengthen his budget positions and lock synergies across its portfolio and deepen its participation in high growth segments of the Nigerian economy, “he said.