Flour Mills of Nigeria Plc, the country’s largest milling company, has announced plans to invest up to $1 billion over the next four years to expand its operations.
The company’s Chairman, John Coumantaros, disclosed this during an interview on Tuesday, emphasizing that the move reflects a commitment to increasing investment in Nigeria.
Flour Mills of Nigeria Plc plans to invest a minimum of $500 million into its sugar operations in Niger State, with the goal of increasing production from the current 100,000 tons to over 400,000 tons annually, according to Chairman John Coumantaros.
Additionally, the company will allocate $100 million to establish a cassava-processing plant aimed at eliminating cassava starch imports. In the full year of 2023/2024 Flour Mills spent around N1.8 trillion on raw materials resulting in its profit declining by 91%.
Coumantaros also mentioned plans to expand their breakfast cereal product line.
The company explained that most of the funding will be internally sourced.
He said, “The requirement for capital is going to be very, very large. And of course we will be backing the majority of that,”
“But when you grow, you can’t do everything yourself. You need to invite those experts of the best in field to really support you and assist you and bring some of that technical expertise so we can grow more business, more jobs here in the country.”
Restructure its business operations
The company also plans to restructure its operations after local partner Excelsior offered to buy out its minority stake and go private.
Flour Mills of Nigeria Plc plans to restructure its over 22 business units into five separate companies, according to Chairman John Coumantaros. “We aim to attract both technical and financial partners to support the growth of our sugar operations and food business. We have ambitious plans for investment and expansion,”
Beyond that, the Chairman disclosed that the company is looking at leveraging on the Africa continental Free Trade Area (AfCFTA) to expand across the continent starting from West Africa.
In his words, “With the inception of the AfCFTA, we believe strongly that we shouldn’t be just looking at the Nigerian market,”
“Our dream is to have a pan-African food business that is headquartered in Nigeria. We’ll take advantage of the AfCFTA so that we can expand our footprint into those regions.”
Dual listing
According to him, the Pan-African food business will likely include a dual listing on the NGX and other stock market.
Coumantaros expressed the company’s intention to relist after it undergoes repositioning. He noted that their goal is to return to the market, potentially with a dual listing as a pan-African food or agro-allied business.
He emphasized that the Nigerian Stock Exchange would play a crucial role in their future, but the company first needs to reorganize, retool, recapitalize, and refocus to be ready for such a move.
What you should know
Flour Mills plan to invest $1 billion in the Nigeria market will come as a confidence booster to President Tinubu whose last 18 months has witnessed the exit of major multinationals in the Pharmaceutical and consumer goods sector.
However, his reforms seem to be paying off. Last month, Coca-Cola announced plans to invest $1 billion in Nigeria to expand production and distribution facilities.
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