- Title: NIGERIA: Flour Mills to invest $600 mln
- Date: 30th August 2012
- Summary: LAGOS, NIGERIA (AUGUST 29, 2012) (REUTERS) VARIOUS OF EXTERIORS OF FLOUR MILLS FACTORY VARIOUS OF FACTORY WORKERS MONITORING FLOUR PROCESSING MACHINES VARIOUS OF MACHINES PROCESSING WHEAT GRAIN INTO FLOUR VARIOUS OF JACQUES VAUTHIER, CHIEF FINANCIAL OFFICER, FLOUR MILLS NIGERIA (SOUNDBITE) (English) JACQUES VAUTHIER, CHIEF FINANCIAL OFFICER, FLOUR MILLS NIGERIA SAYING: "Nigeria economy is growing, it's evolving. GDP per capital is also improving, taste of Nigerian consumers is also evolving. We are here to meet Nigerians' expectations, also in terms of the quality of the products, in terms of satisfaction." VARIOUS OF FACTORY WORKERS PACKING PRODUCTS (SOUNDBITE) (English) JACQUES VAUTHIER, CHIEF FINANCIAL OFFICER, FLOUR MILLS NIGERIA SAYING: "The way forward is very clear, we still have around 20 billion Naira from our rights issue, this will enable us to finance our capital expenditure, our growths for the next 18 months, then we have also a healthy cash flow which will enable us to continue our expansions. That's the way we see it, but definitely we see that we want to invest at least 20 billion per year, in the coming years." VARIOUS OF FACTORY WORKERS SEALING ONE OF THE PRODUCTS WITH MACHINES VARIOUS OF GOLDENVITA FLOUR SACS PASSING THROUGH CONVEYOR BELT/PILE OF SACS OF GOLDENVITA VARIOUS OF WORKERS LOADING UP A TRUCK (SOUNDBITE) (English) JACQUES VAUTHIER, CHIEF FINANCIAL OFFICER, FLOUR MILLS NIGERIA SAYING: "It's a new product range for us, and we plan to further expand it. It was a timely opportunistic investment and obviously we are enthusiastic to be able to further contribute to the development of the economy." LAGOS, NIGERIA (AUGUST 30, 2012) (REUTERS) SURA MARKET IN LAGOS VARIOUS OF SHOPS HAVING FLOUR MILLS' PRODUCTS ON DISPLAY
- Embargoed: 14th September 2012 13:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: Business,Industry
- Reuters ID: LVA4EUUO91V9L8J51WXM9CENX20Z
- Story Text: Flour Mills of Nigeria plans to invest 100 billion naira (600 million USD) over the next five years in Africa's most populous nation as it looks to tap into rising demand for pasta, bread and fast food.
The firm plans to double its 12,000 tonne per day milling capacity to meet the demands of a growing Nigerian middle class, as it turns more attention to fast and convenience foods.
With more than 160 million people, Nigeria has a larger population than Russia and is viewed by investors as a huge potential consumer market, especially as the middle class grows.
The company's Chief Financial Officer, Jacques Vauthier, who joined the miller in 2011 from local rival Nestle, said Nigeria's demand is likely to grow, as it only consumes around 80 grams per person of flour per day, compared with 200 grams in South Africa and 400 grams in Egypt.
"Nigeria's economy is growing, it's evolving, GDP per capital is also improving, taste of Nigerian consumers is also evolving. We are here to meet Nigerians' expectations, also in terms of the quality of the products, in terms of satisfaction," he said.
Vauthier said the Nigerian top miller which has operations spanning pasta manufacturing, cassava processing to packaging, is on track to becoming the world's largest flour miller, as it plans to invest up to 100 billion naira in the next five years.
"The way forward is very clear, we still have around 20 billion naira (125 million USD) from our rights issue, this will enable us to finance our capital expenditure, our growths for the next 18 months, then we have also a healthy cash flow which will enable us to continue our expansions, that's the way we see it but definitely we see that we want to invest at least 20 billion per year, in the coming years," he said.
Last week, Flour Mills posted a 32 percent rise in profit before tax to 5.1 billion naira in the first quarter on 70 billion naira (439 million USD) turnover.
The company has a 55-60 percent market share in the flour and pasta business in Nigeria and aims to expand into higher margin retail products like snacks to defend its market share.
Vauthier said integrating cassava flour into their production is part of its strategy to develop Nigeria's economy.
"It's a new product range for us, and we plan to further expand it, it was a timely opportunistic investment and obviously we are enthusiastic to be able to further contribute to the development of the economy," he said.
The company said next month it will seek shareholders' approval to acquire a 90 percent stake in a privately-held vegetable and edible oil business, Rom Oil.
The firm used part of its 28 billion naira (175 million USD) proceeds from a share sale it concluded in February to part finance its acquisitions but it planned to carry on funding its large-scale expansion through internally generated cash.
Flour Mills has invested $160 million to build a 750,000 metric ton sugar refinery which will be commissioned this year. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
