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. Chairman John Coumantaros shared this in an interview on Tuesday, emphasizing the company’s commitment to increased investment within Nigeria.
A significant portion of this investment, at least $500 million, will go toward expanding the company’s sugar operations in Niger State, with the goal of increasing production from 100,000 tons to over 400,000 tons annually. An additional $100 million will be allocated to establish a cassava-processing plant aimed at eliminating the need for cassava starch imports.
However, Flour Mills reported a 91% drop in profits for the 2023/2024 fiscal year after spending around N1.8 trillion on raw materials. Despite this, the company remains focused on growth and has also outlined plans to expand its breakfast cereal product line.
Funding for these projects will primarily be internally sourced, according to Coumantaros. “The capital requirement is going to be substantial, and we will be backing the majority of it,” he said. He also stressed the importance of bringing in external technical expertise to support the company’s expansion and create more local jobs.
As part of its strategy, Flour Mills plans to restructure its 22 business units into five separate companies. This move follows a proposal from local partner Excelsior to buy out the company’s minority stake and take it private. The company aims to attract technical and financial partners to support its sugar and food businesses.
Additionally, Flour Mills is looking to leverage the African Continental Free Trade Area (AfCFTA) to expand its operations across West Africa, with ambitions of becoming a pan-African food company headquartered in Nigeria.
Coumantaros also hinted at a possible dual listing on the Nigerian Stock Exchange and other markets in the future, emphasizing that the company must first reorganize, retool, and recapitalize before considering relisting.
The $1 billion investment plan could serve as a confidence boost for President Tinubu, whose reforms have recently attracted other investments, such as Coca-Cola’s $1 billion expansion plan in Nigeria.
Credit: Nairametrics (Text Excluding Headline)
