Notore Chemical Industries Plc, a leading Nigerian producer of fertilizers and agro-allied products, continues to grapple with mounting losses in the first half of 2024. Following a loss after tax of ₦114.25 billion in FY 2023, the company’s losses deepened to ₦130 billion by June 2024, a significant increase compared to ₦38 billion during the same period in 2023.
This steep decline in performance is attributed to reduced sales of key products such as NPK and urea, coupled with the absence of income from infrastructure services. Additionally, the company faced a staggering rise in finance costs, which ballooned from ₦28.79 billion in the first half of 2023 to ₦104.42 billion by mid-2024—a 262.6% increase.
Founded in November 2005, Notore Chemical Industries is dedicated to the production and distribution of nitrogen-based fertilizers to enhance soil and water fertility. Operating a fully rehabilitated 500,000 metric tonne urea plant in Onne, Rivers State, since 2010, the company has established itself as a major player in the agro-industrial sector. Its product offerings include Urea, NPK, and Ammonia, with additional operations in blending plants capable of producing 2,000 metric tons daily.
Despite its expansive operations, Notore’s financial challenges have been significant. Revenue from NPK fertilizers plummeted by 98.66%, generating only ₦12.33 million in the first half of 2024 compared to ₦920.73 million in 2023. Sales of urea and other chemicals also dropped drastically by 96.8%, with earnings falling from ₦6.43 billion to ₦206.95 million. Infrastructure services, which contributed ₦476.49 million in 2023, brought in no revenue during this period.
Domestic revenue dropped by 94.7%, shrinking from ₦7.67 billion in 2023 to ₦407.69 million in 2024. Similarly, revenue from international sales fell to zero, marking a complete decline from the ₦247.40 million recorded in June 2023.
The surging finance costs were primarily driven by exchange rate differences on bank borrowings, which rose from ₦14.05 billion in 2023 to ₦80.19 billion in 2024. Additional expenses on interest and borrowing fees reached ₦24.22 billion, compared to ₦14.74 billion in the previous year.
The broader economic environment has compounded Notore’s struggles. In response to inflationary pressures—currently at 34.19%, with food inflation at 40.87%—the Central Bank of Nigeria (CBN) raised its benchmark interest rate to 26.75% during a recent Monetary Policy Committee (MPC) meeting.
CBN Governor Olayemi Cardoso commented on the situation, stating, “The Committee recognizes the challenges posed by rising prices to households and businesses. We remain committed to stabilizing inflation and are optimistic about a moderation in price levels in the near term.”
Notore’s ongoing financial hurdles highlight the severe impact of economic challenges and rising costs on Nigerian businesses.
