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Jumia defends sales figures following controversial Citron report

Citron Research’s report alleges that the company is fraudulent, claiming that its equity is “worthless”

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Jumia is trying to encourage more prepayment to discourage returns or cancellations, the head of its Nigerian business says, following a report by Citron Research, which questioned some of Jumia’s sales figures, last week.

First quarterly earnings call after the initial public offering has provided a chance for Jumia executives to push back against the claims.

Jumia became the first African tech stock to list on Wall Street on April 12 with initial soaring shares which fell sharply on Friday after the publication of the report by Citron Research, run by short-seller, Andrew Left. 

Sacha Poignonnec, Jumia CEO, says the company is transparent and declined direct response to the report’s claims, saying “We don’t necessarily want to feed those types of organisations or people”.

Citron Research’s report alleges that the company is fraudulent, claiming that its equity is “worthless”. The report was particularly centred on “material discrepancies” in Jumia’s S1 filing with the United States Securities and Exchange Commission (SEC) in March and a confidential investor presentation Jumia had made six months earlier.

News of the report further triggered a decline in stock price last week in comparison to an impressive run after the IPO’s initial launch.

“We stand by what we disclosed… the way GMV (gross merchandise value) is calculated in the industry is gross of cancellations and returns,” Juliet Anammah, chief executive of Jumia Nigeria, says

According to Anammah, many customers in Nigeria, Jumia’s biggest market, still only pay by cash when they receive their orders, but Jumia is trying to move customers to its Jumia Pay solution to pay in advance when they check out online. 

It plans to make its marketing spending more efficient, charge merchants for storing their goods in its warehouses, boost sales of advertising on is site and charge sellers to create content, such as images of their products, she said. 

“We are going to monetize value-added services such as Jumia Express and add on more advertising”, she said. 

Investors seem to be satisfied with Jumia’s response as the shares have rebounded over the last day. The stock closed up 8% at the end of business on Monday (May 13) and was set to continue an upward trajectory on Tuesday.

As the company looks to regain investor appetite however, Jumia will hope other numbers in its earnings results inspires some confidence. The company touted strong year on year growth in gross merchandise volume (GMV) growth 58% to £240 million ($270 million)

* GMV is a non-standard accounting metric Jumia uses to show the “total value of orders including shipping fees, value added tax and before discount deductions, irrespective of cancellations or returns.

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PepsiCo to buy South Africa’s Pioneer Foods for $1.7 billion

PepsiCo has offered 110 rand per Pioneer ordinary share in what would be its second largest deal since 2010

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PepsiCo to buy South Africa's Pioneer Foods for $1.7 billion

PepsiCo has struck a deal to buy South Africa’s Pioneer Food Group for $1.7 billion, the companies announced on Friday, lifting Pioneer’s shares and boosting a sector that has been hit by drought and tough trading conditions.

The U.S. drinks and snack group see Pioneer Foods’ product portfolio as complementary to its own and would help PepsiCo to expand in sub-Saharan Africa by adding manufacturing and distribution capabilities. 

“Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well,” PepsiCo Chairman and CEO Ramon Laguarta said in a statement. 

PepsiCo has offered $7.89 per Pioneer ordinary share in what would be its second largest deal since 2010, the companies said, with the news lifting the South African company’s shares by 29.32% to more than 100 rand. 

Shares in agribusiness investment company, Zeder Investments, which holds Pioneer as part of its portfolio, also rose more than 22%. 

“It’s a vote of confidence in South Africa at a time when we really need it,” Pioneer CEO Tertius Carstens says.

Food producers have struggled amid a slump in retail sales as consumers cut back and dry weather hit maize and other produce. 

Pioneer, which uses maize in many of its products, reported a decline in half-year earnings in May, weighed down by shortages in the staple food. 

“It’s almost a signal to other overseas companies that we are open for business. If PepsiCo is willing to put money down it may lift sentiment of other foreign investors that might come looking at South Africa for bargains,” said Greg Davies, equities trader at Cratos Capital. 

Pioneer, whose brands include Weet-Bix cereal, Liqui Fruit juice and Sasko bread, is the latest consumer goods firm to be the target of a buyout after South Africa’s Clover Industries, which processes products including yoghurt, beverages, and olive oil, began takeover talks with a consortium of companies called Milco SA last year. 

Pioneer was in talks over a potential deal with “a multinational organisation” in 2017, but that fell apart after South Africa’s credit rating was cut to junk status.

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Kenya launches Africa’s biggest wind farm worth Ksh7 billion

The wind farm will deliver 310 megawatts of renewable power to Kenya’s national grid

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Kenya launches Africa's biggest wind farm worth Ksh7 billion
Kenya has inaugurated Africa's biggest wind power plant, a mammoth project in a gusty stretch of remote wilderness that now provides nearly a fifth of its energy needs. (Photo by Yasuyoshi CHIBA / AFP)

Kenya on Friday inaugurated Africa’s biggest wind power plant, a mammoth project in a gusty stretch of remote wilderness that now provides nearly a fifth of the country’s energy needs.

The Ksh7 billion ($680 million) project, a sprawling 365-turbine wind farm on the eastern shores of Lake Turkana, is delivering 310 megawatts of renewable power to the national grid of East Africa’s most dynamic economy.

The largest private investment in Kenya’s history, the Lake Turkana Wind Power project was beset with delays and took nearly a decade to rise from the arid landscape 600 kilometres (372 miles) north of Nairobi.

Today, the windmills — scattered across Turkana’s stark lunar landscape and rocky hills — deliver 15 per cent of Kenya’s entire installed capacity, connected to the national grid through a 428-kilometre power line.

“Today, we again raise the bar for the continent as we unveil the single largest wind farm,” said President Uhuru Kenyatta, after touring the project.

“Kenya is without a doubt on course to become a world leader in renewable energy.”

Turkana Corridor –

The project lies in a natural corridor dubbed “the windiest place on earth” and promises to harness this endless power at low cost.

The nearly-50 metre turbines were engineered to handle the fierce gusts that tear through the “Turkana Corridor”, a wind tunnel that generates optimal conditions, year-round.

The winds howling near constantly through the barren valley deliver double the load capacity enjoyed by similar projects in America and Europe.

“It is unprecedented. This is one of the most consistently windiest places in the world,” said Rizwan Fazal, the executive director of the Lake Turkana Power Project.

A Herculean effort was needed to construct the behemoth wind farm in Kenya’s farthest extremes.

The windmills, manufactured by Danish company Vestas, had to be brought one-by-one overland from the Kenyan port of Mombasa, some 1,200 kilometres away. 

Each one was customised so its different segments could be packed “like Russian dolls”, the company said

More than 2,000 trips were needed to bring all the materials from port to plant. 

Some 200 kilometres of road leading to the site had to be tarred to allow trucks through.

Another 100 kilometres of internal roads linking the turbines dotting the hot, desert horizons were also constructed.

‘Incredible journey’ –

The project, far more ambitious in scale than rivals elsewhere on the continent, has been closely watched as a case study of investing in renewables in Africa, where demand for energy is soaring as economies grow and populations swell.

In Kenya — which relies heavily on hydropower and geothermal — power is unreliable and costly, hindering business as energy-intensive sectors such as manufacturing look to take off.

Kenyatta has previously committed to 100 per cent renewable energy for Kenya by 2020 — a pledge the government has been accused of betraying with plans to build a coal-fired power plant off the coast in Lamu.

That project — deemed unnecessary by experts — has been stalled by legal challenges.

The Turkana wind farm involved years of planning and construction but the turbines went up quicker than one a day, with the last raised in March 2017, ahead of schedule.

But difficulties in financing the transmission line, being laid by state-owned power company Ketraco, and problems acquiring land, meant this landmark project didn’t connect to the grid for another 18 months — in September 2018.

“The farm was built on time. But the project can only operate if you can bring power to the client,” said Catherine Collin, East Africa head of the European Investment Bank. 

The EU’s lending facility loaned $200 million for the project, which received other finance from a consortium of European and African companies

“There was a delay, there was a few difficult moments, I have to say, for everybody, but in the end we all made it,” Collin said.

Fazal said it had been “an incredible journey” but more than anything it let the world know Kenya’s untapped clean energy markets were open for business.

“It sends a very strong signal about Kenya being ripe for projects,” he said.

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Coscharis Group, Renault form partnership in Nigeria

Logans and Dusters will be assembled in the existing Coscharis Assembly facility in Lagos

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Coscharis & Renault form partnership

French carmaker, Renault and Nigerian conglomerate, Coscharis Group have formed a partnership to assemble and distribute Renault vehicles in Nigeria, the companies have announced. 

The Coscharis Group plant will start assembling Renault Logan and Renault Duster vehicles and will distribute the cars through their sales network throughout Nigeria from October. 

Logans and Dusters will be assembled in the existing Coscharis Assembly facility in Lagos, where it already puts together the Ford Ranger at the SKD plant, while Renault’s Kwid and Oroch vehicles will be imported from Brazil.

“With a population of over 200 million, Nigeria is a strategic African country where Groupe Renault will extend its footprint,” said Fabrice Cambolive, senior vice president and chairman of Africa, Middle East and India Pacific region of Renault.

Renault has an 18% market share on the African Continent and sold more than 216,000 vehicles in 2018. The most important countries in sales volume are currently Morocco, Algeria, South Africa and Egypt.

Coscharis Group, established in 1977, is a wholly-owned Nigerian conglomerate with interests in various sectors, which include automobiles, information and communications technology, logistics, agriculture, food & beverages, property and health, among others.

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