Vitafoam Sees Prospect In Merger With Vono

Vitafoam Nigeria Plc anticipates higher business earnings and enhanced shareholder value on account of its merger with Vono Products Nigeria Plc.

The optimism was expressed by the firm’s Group Managing Director, Mr. Taiwo Adeniyi, on Thursday during a media briefing in Lagos.

“We are optimistic that the merger of Vono Products Nigeria with Vitafoam Nigeria will translate into higher earnings and enhanced shareholder value,” he said.

But Adeniyi, who reviewed the current operating environment, appealed to the Federal Government to create the enabling environment for manufacturers in view of the effects of high exchange rate of the naira on importation of raw materials.

He explained that the shareholders of both companies overwhelmingly endorsed the merger at a recent extra-ordinary general meeting.

According to him, the shareholders appreciated the potential benefits of the merger, which include economies of scale, cost savings and improved operational and administrative efficiencies. Adeniyi noted that the enlarged company would enhance growth in size.

He added, “I can assure you that we, at Vitafoam have always been thinking ahead. The issue of merger started about five years ago. Vitafoam is not just about mattresses only; we have many products for human comfort. As you know, Vono is also a brand.

“If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vitabloom, Vitagreen and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose.

“We are truly a national company. We have a full fledged factory in Ikeja, Kano, Aba and Jos. We also have factories offshore. We operate in Sierra Leone and Ghana strategically to position the centre for inflow of dollar in the long term because these are dollar-based business environment.

“They may not be generating expected profit for now but they have high prospect. The key issue is that Vitafoam as a group has a very bright future and the shareholder value will be greatly enhanced. As a mark of competence, Vitafoam is ISO certified.”

In the same vein, Vitafoam’s Group Executive Director, Corporate Services, Mr. Olatunji Anjorin, described the merger as a vertical one as the furniture produced by Vono Products would complement Vitafoam’s foams.

Anjorin explained that the consummated merger would put an end to encumbrances militating against Vono’s growth as well as bring about more efficient expertise, shared value and improved technology.

Commenting on the operating environment , Adeniyi lamented the plight of manufacturers and pleaded that the federal government should address the chronic shortage of dollar and also revive Eleme Petrochemical Industry to live up to its strategic objective of serving as a hub for providing raw materials.

He explained that one of the company’s subsidiaries would soon commence production of vehicle filter and other components as the company has capacity to do that .

Speaking on the efforts being made by the company to further educate the customers on the uniqueness of the company’s products, Adeniyi said, “We were set to commence buy right of consumers whereby they can base their purchase decision on expert’s opinion in term of utilitarian value.”

Commenting on the current quarterly results, the company’s Chief Accountant, Mr.Joseph Alegbesogie, explained that despite the challenging operating environment , the company was able to declare a dividend of 25 kobo per share, an evidence of high premium placed on the need to reward shareholders.