United Africa Company of Nigeria (UACN) has listed low purchasing power, associated logistics challenges,100 percent reliance on company generated power and difficult operating environment as the reasons why it decided to liquidate its water business, Gossy spring water.
The disclosure further lends credence to the position by members of the organised private sector about a difficult environment for business in the country. The Nigeria central and sub-regional governments have made claims about a conducive environment for investors and businesses but organised private sector has countered with claims that more industries are closing down operations on a regular basis due to various challenges.
In a statement to the Nigerian Stock Exchange (NSE) and signed by Godwin Samuel, company secretary and legal adviser, UACN said: “Since the company commenced commercial production in 2003, the company has been delivering weak operational performances due to problems associated with rural location of the plant at the source of the spring.”
“The contribution of the company to the group’s results is less than 1 percent as it delivered a turnover of N369 million and loss before tax of N78 million in the 9 months ended 30 September 2017, which made the shareholders of the company at a meeting held on 6 February 2018 resolve to appoint a liquidator to wind up the affairs of the company and distribute its assets,” he said.
UACN said the 76 percent owned subsidiaries, promoted in 2002 by the Ekiti State government and some private investors, has been bleeding its groups’ earnings hence the need to liquidate it