Chellarams Plc has a bleak future


Chellarams Plc is a company trading on the Alternative Securities Market (ASEM) of the Nigerian Stock Exchange. The company has operations in various sectors of the economy including trading, real estate, fast, information technology and power generation. One of the company’s easily recognised brands is the Kentucky Fried Chicken which has branches across the country.


A large proportion of the company’s revenues are earned from Fast Moving Consumer Goods (FCMGs), sale of plastic film, and industrial chemicals. Of the N12 billion in revenue earned by the  company in 2016, N3.8 billion was from FCMG, N2.7 billion was earned from industrial chemicals and N3.8 billion from the sale of plastic film. FCMG comprises sale of milk. This leave the company at the risk of exchange rate volatility as was witnessed in 2016.  Exchange rate losses increased from N400 million in 2016 to N600 million in 2017.

Revenue has also been declining across key segments. Revenue from the FCMG segment declined from N7.5 billion in 2015 to N3.8 billion in 2017. Revenue from Industrial chemicals also declined from N10.8 billion in 2015 to N2.7 billion in 2017.

Revenue segment 2015 Earnings 2016 Earnings 2017 Earnings
FCMG 7,550,643 6,308,931 3,840,876
Industrial Chemicals 10,898,532 7,891,752 2,728,452
Machinery 1,729,922 1,313,769 1,110,955
Plastic film 1,867,864 2,217,529 3,822,990
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Shareholders have nothing to cheer about

In terms of value added, shareholders have very little to benefit as a greater percentage of the company’s earnings are spent on bank charges and employee benefits.  Figures from the March 2017 annual report show 33% of the company’s revenues go to paying employees, wages salaries and benefits while 36% goes to providers of capital.

Chellarams Plc has a bleak future - Brand Spur

Negative retained earnings of N1.1 billion as at March 2017, means the company is unlikely to pay dividends anytime soon.


Though the company has signed an MOU with a German firm to begin dairy production in the country, the sector is one that has stiff competition from the likes of Cowbell, and WAMCO (makers of Peak Milk) who are dominant players in that segment . The Dangote Group has also unveiled plans to go into dairy production in the next two years.


Except the company embarks on a fund raising drive for its expansion plans, it will continue to play second fiddle in the areas it operates. Declining revenues are a symptom of the company losing market share to its competitors.