Nigerian construction company Julius Berger seeks to diversify into agro-processing

Image source: Footprint to Africa

NIGERIA – Julius Berger Nigeria Plc, a civil engineering and construction company in Nigeria has announced its seeking to diversify its operations into agro-processing as part of its efforts to deliver on the company’s long-term strategy.

According to reports by The Punch, the Board of the company have approved the move as its quest for more operational rigor, given the widespread economic vulnerabilities in the country and the resultant reforms by the government.

“The Board of Directors and the executive management of Julius Berger strongly believes that this diversification direction would support the continued success of the group in the future and align with the strategic objective of the government to stimulate value creation in Nigeria.”

Julius Berger

The company made this known in an Adhoc announcement sent to the Nigerian Stock Exchange (NSE), the investing public, and other stakeholders in the Capital market.

“We would advise the exchange and the capital market that the Board of Julius Berger at its meeting held on September 22, 2020 approved a diversification opportunity for the company in agro-processing.

“The Board of Directors and the executive management of Julius Berger strongly believes that this diversification direction would support the continued success of the group in the future and align with the strategic objective of the government to stimulate value creation in Nigeria,” read part of the statement.

This is the second diversification move by the company in recent times following the acquisition of 20% equity stake in Petralon 54 Limited (P54L), a wholly owned subsidiary of Petralon Energy Limited (PEL), through Julius Berger Investments Limited (JBIL), a wholly owned subsidiary of Julius Berger.

The need to broaden its revenue away from the construction industry may not be unconnected with the difficult business environment in recent times, reports Invest Data.

The company slipped into a N2.398bn (US$6.2m) loss in 2016 but in 2017 it returned to profitability, netting N2.572bn (US$6.6m). PAT soared to N6.101bn (US$15.7m) in 2018, before growing by 43.56% to N8.759bn (US$22.6m) last year.

Other Nigerian companies which have diversified their operations to include agro-processing are Dangote Group known for cement manufacturing, also undertakes sugar refinery, tomato processing, Flour milling etc.

BUA Group, one of the leading agribusiness and food processor in Nigeria operates oil processing mills, sugar refinery, flour mills and has also ventured into cement production and port operations.

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