Nigeria-based fertilizer maker, Notore Chemicals Limited has got regulatory approval to list its shares on Nigerian Stock Exchange (NSE).

The company got approval to list “by introduction” 1.6billion units of its shares on the Nigerian Bourse at N62.50 per unit. This gives the company a potential valuation of N100 billion.

A source at the Securities and Exchange Commission (SEC), who confirmed the development to BusinessDay said the company has registered with the capital market apex regulator for its share listings on the Nigerian Bourse. The source could not disclose the specific date for the share sale although BusinessDay gathered earlier that the listing will be done this third quarter (Q3).

Ahead of the listing, the Board and executive management of Notore will visit the Exchange and capital market stakeholders on Thursday, August 02, 2018 to present a “fact behind the listing” presentation. The presentation is expected to give the management of Notore an opportunity to give investors details about the company’s prospects and plans for the future.

Notore in 2015 signed a strategic gas supply agreement with Eroton Exploration & Production Company, an indigenous oil and gas producer. The agreement is expected to result in enhanced production of fertilizers from the Notore facility, giving the fertilizer, agro-allied, petrochemical and power company a strong competitive edge over other producers.
Due to the availability of gas to the Notore plant, production days per annum has increased. Production was previously constrained because of the number of forced shutdowns the plant had experienced.

Production is expected to increase further to 100 percent of the plant’s installed capacity after the next planned turnaround maintenance, which is due to happen in a few months.

Speaking on the enhanced productivity from the fertilizer plant, the Group Managing Director/CEO of Notore, Onajite Okoloko, said the partnership between his company and Eroton has ended the gas supply shortfalls, which hampered productivity at Notore between 2013 and 2014.
According to Okoloko, significant shortfalls to its facility during the period for approximately 234 days cumulative, owing to incessant militant attacks on oil and gas infrastructure in the Niger Delta, led to a significant drop in output from Notore.

“Our fertilizer plant depends on gas as a major feedstock for production, so when the attacks affected gas supply from oil and gas producers, this had a corresponding impact on our productivity.
“Notore’s plant has the capacity to produce 500,000MT of urea annually and 330,000MT of ammonia per annum, but this was halved between 2013 and 2015 because of gas supply challenges.”

“But with the gas supply agreement entered into with Eroton which has proven gas reserves of 5 trillion standard cubic feet and is just 14 kilometres away from our facility, production has improved significantly,” he said.
The Notore chief executive said with the security in gas supply and significant gas reserves, the company has not experienced gas supply disruptions since Eroton commenced supply to its production facilities in March 2016, adding, “Notore is almost technically backward integrated on its own feedstock, which provides a strong competitive advantage.”

He said Notore also invested in a maintenance programme on the Onne fertilizer plant in the fourth quarter of 2016 to improve the reliability of the plant, adding that plans were in place for another scheduled maintenance in the first quarter of 2019, in order to optimize production from the fertilizer plant.
Okoloko, however, noted that fertilizer usage in Nigeria remained low, putting consumption at between 10 and 15kg per hectare, in contrast to the Food and Agriculture Organisation’s recommended 200kg/ha.

“But we continue to educate and train subsistence and commercial farmers, as well as give them access to fertilizer through our distribution chain at appropriate pack sizes and affordable prices.
“We have a very effective distribution network that makes sure our fertilizers gets to the farmers. With over 350 trucks, 80 plus distribution partners and more than 3,000 retail outlets, we are able to reach millions of farmers in several local governments and states in the country,” he said.

Notore Chemical Industries Plc (Notore) is one of the leading fertilizer, agro-allied, and power companies in Africa and is committed to helping Nigeria and the African continent become self-reliant in food production and economic wealth. Under the leadership of Group Managing Director/CEO, Onajite Okoloko, after acquiring the assets of the former National Fertilizer Company of Nigeria (NAFCON) through the federal government’s privatisation programme, Notore has since grown into an agricultural firm, targeting local markets as well as exports.

The company’s principal activities include the supply of premium fertilizers, appropriate education on best practices for farming, and proper deployment of these practices for optimum results. The company has built a robust network of professionals that support farmers and farming communities across Nigeria.

After Notore acquired the assets of the moribund NAFCON in 2005, the company raised more funds from a syndicate of Nigerian banks and commenced extensive rehabilitation of the plant in 2007. In early 2010, it started commercial production and distribution of fertilizer across the country.

Notore listing on the Nigerian Bourse will enliven primary markets activities which have remained calm this year having failed to continue the pace of recovery seen in 2017. Though, the 2017 primary markets activities were dominated mostly by supplementary offers, listings by introduction, debt issuances, mergers and divestments.
Many businesses have shown interest in listing shares on the Exchange due to improving macroeconomic fundamentals. The market patiently awaits Telecoms giant, MTN which has indicated it will list its Nigerian unit and raise funds through an Initial Public Offering (IPO) this year.

SAHCOL, Nigerian Reinsurance Corporation and Indorama Eleme Petrochemicals are among companies following the footsteps of the MTN Group. They are expected to in the second half (H2) of the year.

“A resurgent public offering would help deepen equity market, provide more investment options and trigger greater investor participation in the long-run,” according to research analysts at Lagos-based Vetiva Capital Management Limited. Notore listing by introduction implies the company’s shares were bought without a prior Initial Public Offering (IPO).

It means that the company would usually have raised capital prior to applying to list by introduction, and also must meet the listing requirements – including a minimum number of public shareholders – 300 to list on the Main Board; 51 to list on the Alternative Securities Market (ASeM) and minimum public float (20percent for the Main Board; 15percent for ASeM.

Notore operations are divided into three units: fertilizer, power, and seeds. Early this year, (January), Notore obtained a Free Trade Zone (FZE) license. The FZE located in Eleme, Rivers State is expected to kick off operations in the next two years.

Notore listing on the NSE will avail legacy investors the opportunity to exit if they wish. Notore was founded in 2005 by a group of investors led by Onajiite Okoloko. Other members of the consortium include private equity firm Emerging Market Partners and Orascom of Egypt.

The company bought over assets of the defunct National Fertilizer Company (NAFCON), One.