The sale of Peugeot Automobile Nigeria(PAN) Limited by Asset Management Company of Nigeria (AMCON) to the consortium of Dangote, the states of Kaduna, Kebbi, and the Bank of Industry(BOI) nears completion as the final hurdle is the outstanding approval from the Central Bank of Nigeria (CBN). This will finalize the sale Process by AMCON that started with bids placed in Early 2016.
The eye opener is the valuation of the PAN assets at over 15billion Naira. That’s $46.2million at the current exchange rate. This price is higher than other recent Automotive plant liquidations in the USA. Most recently the Mitsubishi Plant located in Illinois, USA was sold for $2.5million at a valuation of $17.5million in June 2016. Going back a few years, the GM/Toyota joint venture NUMMI Fremont plant in California for sold for $42million to TESLA in 2010, GM previously sold it’s Wilmington Assembly plant to Fisker Automotive for $18million and in 2007 ANAMMCO, another Nigerian government owned plant in Enugu state was sold for N657million for %24 stake valuing the plant at N2.7billion and $20million at the 2007 exchange rate. For comparison The table below shows a list of Assembly Plants, Their Size and Liquidation price.
|Plant||Location||Site Size (ha)||Plant Size (m2)||Capacity (Cars/yr)||Liquidation Valuation||Year of Sale|
|Mitsubishi America||Illinois, USA||257||232,000||300,000||$17,500,000||2017|
|Peugeot Nigeria||Kaduna, Nigeria||40||100,000||90,000||$46,200,000||2017|
|GM Wilmington Assembly||Delaware, USA||58||300,000||300,000||$18,000,000||2009|
|NUMMI Fremont Plant||California, USA||150||510,000||500,000||$42,000,000||2010|
Looking at the numbers, The PAN Plant looks to have the highest valuation without accounting for inflation. Also looking at the Price to Site size ratio, the PAN again is the highest at $1,155,000/ha with the Mitsubishi plant being the lowest at $68,093/ha. For Price to Plant size ratio, this time the ANAMMCO plant is the highest at $500/m2 followed closely by PAN at $462/m2 with the GM Wilmington plant cost the least at $60/m2. In terms of price per unit capacity, again the PAN plant is an order of magnitude more expensive relative to the rest at $513/unit while the next plant is the NUMMI Fremont plant at only $84/unit. Full comparison in the table below.
Plant $/ha $/m2 $/capacity
Peugeot Nigeria $1,155,000 $462 $513
ANAMMCO $606,061 $500 NA
GM Wilmington Assembly $310,345 $60 $60
NUMMI Fremont Plant $280,000 $82 $84
Mitsubishi America $68,093 $75 $58
Now there are other factors that go into Asset valuation and each market is unique, but it’s just interesting to wonder what criteria is used in the valuation of PAN and also what criteria the consortium of Dangote and co. used to place their bid for the plant.
Below is a Google Earth image comparison of Mitsubishi America plant, Peugeot Nigeria plant, and ANAMMCO plant showing relative size. The Mitsubishi plant has a 2.2km test track on site