Vitafoam unfolds measures to boost shareholder value

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.