Dangote to Produce Peugeot in Nigeria Dangote to Produce Peugeot in Nigeria Business Post Nigeria

Aliko Dangote Franchised to Produce Peugeot in Nigeria Featured

Business & Economy / Saturday, 02 June 2018 00:29

Chairman of Dangote Group of Company, Alhaji Aliko Dangote on Friday disclosed that the group  acquired the franchise to manufacture Peugeot brand of cars in Nigeria. The French car brand, established its vehicle  assembly facility.   in1972, in  the northern regional city of Kaduna, some 900 km from Lagos. Until recently, the plant was  operated under a joint venture agreement between Peugeot of France and Nigeria's government, under the name, Peugeot of Nigeria (PAN).
The Nigerian vehicle assembly plant had PSA Peugeot Citroen as its technical partner with a capacity to assemble 90,000 cars a year. 

PAN however fell into hard times and witnessed its annual sales  deplete from 24% to under 2% of Nigeria's auto market, over a course of three decades. Efforts by managers of the plant to reposition it only resulted in further woes as tranches of loans infused to expand production capacity failed to yield  desired results.  Mired in debts owed local financial institutions it was unable to repay or service, PAN was taken under administration by Nigeria's  Asset Management Company of Nigeria (AMCON), the country’s ‘bad bank’ set up  in 2010 with a $4 billion rescue fund in deal to rescue nine local financial institutions that almost collapsed following bank crisis witnessed in the country in that era.  

The asset management company indicated an interest to strip and  sell assets of PAN early last year, a development that attracted a   bid tendered by the   Dangote Group, in conjunction with the states of Kaduna and Kebbi and Nigeria's  Bank of Industry (BOI) development bank for majority control of the plant..  

 Dangote Group  which  made an initial  bid of 26 million EUR to acquire majority stake in Peugeot Automobile Nigeria (PAN,is  inviting members of the public to tender for the construction of a new plant for the company.The group revealed that the new plant will be located in Dutse, along the Kaduna-Abuja expressway . Other vehicle brand such as Innoson, Toyota, Nissan, Mitsubishi, ,  Kia and Leyland plants operating in the Nigerian market are expected to face stiff competition for market share, from the Dangote Group. The group is known for its access to ready credit with which set up production lines at short notice.This enables it to vigorously pursue its famed  pro volume sale strategy at price regimes that appear  to hug margins between operation cost and minimum profit. By so doing, it is able to achieve quick turnover without posting losses in short  term planning, while retaining a vision of market domination in the middle and long term.

By venturing into auto mobile production, Alhaji Danogote is again reinforcing his diversification policy which has seen his group establish some of the world's largest cement plant, sugar refinery and the group's largest petroleum refinery in the world, due for commissioning in 2019. Dangote Group has also invested heavily in agriculture, even while acquiring cement plants in many countries in Africa, and in Nepal as well. 

Afrika247 report. 
 

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