NIGERIA – Kellogg’s announced it was investing US$420 million for an unknown stake in the Tolaram Africa Foods (TAF), a packaged foods manufacturer for the Nigerian and Ghana market as the US food and cereals company seeks to strengthen itself in the continent.
The acquisition, announced in its first-quarter financial report will strengthen its position in the food business and provides it opportunities to grow in cereal and convenience foods including pastries and snacks.
In the financial report, Kellogg’s said sales grew 4.7% to US$3.4 billion highlighting expansion into emerging markets as an important element of its growth strategy.
According to the company, the partnership with the Singapore-based Tolaram that dates back to 2015 offers it growth opportunities given their strong relationship, attractive brands, local expertise, and a proven business model.
Kellogg’s entered an agreement with Tolaram to form the joint venture, TAF whereby it had a right to secure a stake in the venture in the future.
TAF works in collaboration with Multipro Enterprise which distributes TAF’s products and in which Kellogg has held a 50% stake since 2015.
In 2016, Kellogg’s and Tolaram formed another joint venture, Kellogg Tolaram Nigeria Limited (KTNL), a company that markets and distributes breakfast and snacks brands in West Africa, and noodles across Africa.
“We have been delighted with our partnership with Tolaram.
Multipro is an unrivalled distributor in West Africa, with best-in-class logistics and consumer activation capabilities.
Our investment in TAF links us to a leading packaged foods company in that market, with key brand building capabilities and share leadership in the noodles category,” said Amit Banati, president of Kellogg Asia-Pacific.
Amit revealed that KTNL recently launched Kellogg cereals in Nigeria, which are also produced locally as it looks forward to expanding its cereals and snacks business in West Africa and noodles across Africa.
In its future outlook, Kellogg expects sales growth of 3% to 4% in 2018, 2.2% in the first quarter to reflect eight months of net sales from Multipro.
