VITAFOAM Nigeria Plc has commenced a new initiative to reduce operating costs and boost shareholder value.
Besides, the manufacturer of flexible, reconstituted and rigid foam products has almost concluded arrangements to commence production of oil filters and allied motor spare parts through its newly established subsidiary.
Addressing the elated shareholders at the company’s Annual General Meeting (AGM) in Lagos, its Chairman, Dr Dele Makanjuola, explained that harsh operating environment had forced the company to embark on cost saving initiatives in order to sustain its competitive edge.
Makanjuola, who reviewed the current challenges facing manufacturing firms in Nigeria, noted that Vitafoam was able to remain profitable due to the prudent approach towards management of human and material resources:
“The foam business is operating in a very competitive environment. There are over 300 manufacturers. It is stressful to operate in the foam industry. As professionals, we have tried to keep administrative and financial cost under control. This prudent approach enabled us to generate profits and declared dividend. of 25 kobo per share in an environment where many companies are closing business. We were able to achieve this feat despite the high cost of operation because of our careful management practice.
“ As we try to control our cost, we have decided to limit our exposure to our subsidiaries to a maximum of 40 per cent. This is expected to relieve us of financial burden of 100 per cent ownership. We can always raise 60 per cent equity through private placement.
“We have almost concluded plan to commence production of oil filter in our new subsidiary. As for Vono Products, we shall keep the brand. We have gone to the Corporate Affairs Commission (CAC) to ensure that the brand is not taken away ,” Makanjuola said.
Corroborating him, the Group Managing Director, Mr. Taiwo Adeniyi, said the decision to float a new subsidiary, Vitaparts Nigeria Limited, was to provide products for motor spare parts which is in high demand. “We shall enjoy pioneer status in the country as there is no manufacturer of these parts yet in the country,” he added.
Adeniyi, who assured the shareholders of higher value, lamented the effects of forex scarcity and imported raw materials on the production of foams in Nigeria. He, however, expressed optimism that Vitafoam would continue to operate optimally as measures have been put in place to strengthen the company’s operations with cost saving approach.
Many shareholders commended the company’s board and management for the good performance in spite of the tough business environment while some canvassed more cost control measures.
In giving assurance of continuous improved performance, Makanjuola said: “Despite this uncertain disturbing outlook, our company will remain resolute in the implementation of nascent strategies that will enable the harvesting of low-hanging opportunities in the economy to improve growth prospects across several markets.
“Innovation and new products development will be the key drivers of our corporate strategy. We shall stay committed to the company’s brand reposition of “much more than mattress” by broadening the scope of our products offerings across the Vitafoam Group .”
By the company’s profile, Vitafoam Nigeria Plc is a leading manufacturer of flexible, reconstituted and rigid foam products. It has the largest foam manufacturing and distribution network which facilitates just in time delivery of finished products throughout West African Sub region.