CIC overseas expansion on hold due to delay in subsidy payments
CIC Holdings PLC is reconsidering plans of expanding overseas on the back of a delay in fertilizer subsidy payments which has impacted its finance cost, sources close to the company said.
The company whose agriculture and livestock arm contributes nearly 63 per cent of the group’s revenue was finalising parties in African locations to forge partnerships for agricultural farming by next year.
“The company was planning to go to Kenya, Ethiopia and Uganda with horticulture and rice production through their partners in the Middle East. And while it was at a preliminary stage, the company had solid plans to identify land in these countries and make a commitment,” a source told the Business Times. CIC was discussing with two partners – one in Qatar and another in Saudi in this regard.
Analysts said that the prolonged trade receivables from the fertilizer subsidy led the group to slow down in importing and distributing fertilizer during the current quarter.
The source said that the delay in subsidy payments, which account for nearly 80 per cent of CIC’s agriculture and livestock sub sector resulted in high interest cost, which led the group to witness a loss of Rs 75.3 million in the first quarter of 2013/14.
Finance cost escalated by 72 per cent year on year to Rs 531.1 million in the said quarter against Rs 308.9 million in the corresponding quarter last year.
This sector is involved in producing agricultural inputs such as seeds, planting material, livestock products, distribution of machineries plus blending and marketing fertilizer.
comments powered by Disqus