Spotlight on Nigeria¡¯s aluminium sector

The Las Vegas City Council unanimously approved a watered-down liquor ordinance Wednesday that bans liquor in open glass and aluminum containers on the Fremont Street Experience.

The plastic- or paper-only zone was reduced in size from an earlier version that covered 32 blocks downtown.

The ordinance, which takes effect Sunday, puts more of an onus on owners of packaged liquor stores and their employees. But it also eliminated language that the customer who opens a bottle of beer or other liquor on the mall could be guilty of a misdemeanor punishable by up to a $1,000 fine and up to six months in jail.

Other changes to liquor ordinances will be introduced at a later date, and penalties for customers could be reintroduced. There are concerns that tourists will not return downtown if they are prosecuted for opening a can of beer on Fremont Street.

One of the physiological needs, according to Abraham Maslow, the quintessential motivation theorist, is shelter. It is one of the paramount needs of man that has to be met if he is to survive.

No nation can achieve the desired economic growth and development without the provision of affordable housing for its citizenry.

Our discussion this morning is centred on one of the opportunities and threats of those that manufacture aluminium roofing sheets. We are analysing First Aluminium plc and Aluminium Extrusion plc, both in the roofing sheet industry.

The cumulative revenues of the two firms based on their full-year results remained flat at N10 billion. It means that there was no significant increase at the top-line level as a result of huge input cost bedevilling local producers, as well as from competition from imports.

The cumulative profit before tax however increased to N159.26 million in 2013, from a loss position of N975.67 million in 2012.

Cost-to-sales margin, which measures the relationship between cost of production and turnover, was as high as 90 percent. Gross margins were also hit by copious production cost as it remained at just 2.47 percent.

For local manufacturers to reduce cost and maximise profits, they should use gas that is a cheap alternate source of energy to generate power compared with fuel oil from the grid, which is more expensive.

The unfair competition from China is also undermining the Nigerian aluminium industry growth as it encourages mass importation (some say dumping) of the commodity into the country.

Government should encourage roofing sheets manufacturers through tax incentives to help them better compete and boost local production.

However, there are also huge opportunities in the Nigerian economy as the roofers should be able to tap into the rapid urbanisation as a result of population explosion, surge in the demand for building materials and the new mortgage refinancing scheme by the federal mortgage authority to drive growth.

Nigeria with a population estimated at over 170 million, and growing at a rate of 3.5 percent per annum, has a shortfall in the supply of housing units that has been estimated to be between 16 – 17 million.

Furthermore, with an economic growth rate averaging 7 percent per annum in the past five years, Nigeria has witnessed a growth in the number of middle-class families with the associated need to have a home of their own, thereby further deepening the real estate market in Nigeria, hence roofing needs.

It should be noted that over 60 percent of the entire population of the country live on rented accommodation, and this indicates another embryonic market for the Nigerian roofers to exploit.

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