NIGERIA – Flour Mills of Nigeria Plc, the country’s biggest miller by market value, will seek expansion opportunities in Africa after streamlining its domestic business to focus on food in the continent’s biggest economy.
“That will be the next phase of growth,” Paul Gbededo, Chief Executive Officer, said in an interview on July 24 in Lagos, according to a Bloomberg report. The company will target joint ventures and acquisitions in other countries, he said, declining to name them or give a time frame.
Flour Mills, which sold its stake in United Cement Co. of Nigeria Ltd. to Lafarge Africa last year, to focus on food and agriculture-related activities, has invested over $1 billion in areas including feed-mill expansion, sugar refining and vegetable oil production in the last five years, Gbededo said.
The company plans to invest in sorghum mills at its Northern Nigeria Flour Mills unit, with a target of 20,000 to 30,000 metric tons of the foodstuff annually in the next three to five years, he said.
Nigeria is attempting to revitalise its agriculture industry to diversify the economy away from crude oil, which accounts for about two-thirds of government revenue.
The Central Bank of Nigeria (CBN) last month restricted the sale of dollars to importers of some goods, including food, in an effort to conserve foreign exchange and boost local production. The opportunities that exist in food in Nigeria are present in many African countries, according to Gbededo.
“Food that we can grow here — where we have comparative advantage, we have to be investing in that and grow our capacity in feeding ourselves,” he said.
The company plans to raise as much as N40 billion ($202 million) in equity this year, or in early 2016as it seeks to reduce debt and increase working capital, he said. “We will continue to invest in key growth areas of our portfolio.”
Flour Mills Nigeria shares fell 0.1 percent to 28.99 naira at the close of Lagos trading, extending its decline to 26 percent this year, valuing the company at N76 billion.