SPPC Incurs Serious Losses

Shareholders of the Super Paper Products Company (SPPC) Limited, for a year running, were denied dividends following a loss incurred by the company last year. The company made a loss of ?13.6 billion as a result of high administration cost of ?4.7 billion as against a fall in total production at the end of its accounting year in 2002.

''In view of these poor results, directors have not recommended payment of dividend to the year 2002'', Mr. S. K. Anatsui, Chairman of the Board of Directors of SPPC told thousands of shareholders at the National Theatre Hall, during the 12th annual general meeting of the company held on Wednesday.

According to the board chairman, SPPC, producers of ''Rose toilet roll'' in the country, further suffered losses as a result of the continuous use of obsolete machinery, which contributed to a high cost of production.

''There were frequent breakdowns of machinery and these affected production, greatly making it to fall below that of the previous year'' Mr. Anatsui noted.

Addressing shareholders, the board chairman of SPPC said turnover for the company last year was ?18.8 billion, indicating a mere increase of 2.4% over the previous year’s figure of ?18.4 million.

Additionally, he noted that cost of sales in the year under review was ?14.4 billion, indicating an increase of 5.5% over that of the previous year’s figure of ?13.6 billion.

However, selling and administration expenses shot up considerably to ?4.7 billion in the year, 2002, as against the total amount of ?3.9 billion, the previous year, indicating an increase of 20%.

Mr. Anatsui noted that the misfortune of SPPC in the year under review was necessitated by the harsh, unfavourable and unpredictable economic conditions that affected industries in the country.

The board chairman said SPPC was greatly affected by the removal of 20% special duty on imported finished goods in the year 2001, making the local industries to compete with imports into the country.

The removal of the special duty favoured importers as it made their goods cheaper and very competitive, Mr. Anatsui has said.

In effect, the product of the company, rose toilet roll, suffered excessive competition from several new brands of toilet rolls imported into the country.

The operations of the company also suffered exceedingly from major components of the company production process such as high cost of utilities, fuel as well as irregular electricity supply, the board chairman emphasized.

Management of SPPC is therefore negotiating with some financial institutions for a guarantee support to purchase machinery for the company, the board chairman noted.

According to Mr. Anatsui, manufacturers have demanded 15% down payment of the cost of the machinery as the remaining 85%, would be financed from the Exim Bank.