Flour Mills plans $1bn expansion

Flour Mills of Nigeria Plc has announced plans to invest up to $1bn over the next four years to expand its operations.

According to a statement, the company’s chairman, John Coumantaros, disclosed this during a recent interview.

He emphasised that the move reflected a commitment to increasing investment in Nigeria.

Coumantaros said, “Flour Mills of Nigeria Plc plans to invest a minimum of $500m into its sugar operations in Niger State to increase production from the current 100,000 tons to over 400,000 tons annually.

“Additionally, the company will allocate $100m to establish a cassava-processing plant to eliminate cassava starch imports. In the full year of 2023/2024, Flour Mills spent around N1.8tn on raw materials, resulting in its profit declining by 91 per cent.”

He also revealed plans to expand its breakfast cereal product line.

He further explained that most of the funding would be sourced internally.

“The requirement for capital is going to be very large. f course, we will be backing most of that, but when you grow, you can’t do everything yourself.”

:@You need to invite those experts of the best in the field to support you and assist you, as well as bring some of that technical expertise so that we can grow more business and more jobs here in the country,” Coumantaros stated.

He added that the company planned to restructure its operations after Excelsior, its majority shareholders, offered to buy out the minority stake and go private.

The chairman stated plans to restructure its over 22 business units into five separate companies.

“We aim to attract both technical and financial partners to support the growth of our sugar operations and food business. We have ambitious plans for investment and expansion,” he added.

The FMN chairman announced plans to leverage the AfCFTA to expand across Africa, beginning with West Africa.

“Our goal is to build a pan-African food business based in Nigeria, using AfCFTA to grow our presence,” he said.

Coumantaros mentioned that the pan-African food business might pursue a dual listing on the NGX and other stock exchanges.

He also stated the firm’s plan to relist after its repositioning, aiming to return to the market, potentially as a pan-African food or agro-allied business with a dual listing.

Meanwhile, Coumantaros also emphasised that the Nigerian Stock Exchange would play a crucial role in FMN’s future, adding that the company first needed to reorganise, retool, recapitalise, and refocus to be ready for such a move.

“Flour Mills’ $1bn investment in Nigeria will boost confidence in President Tinubu, whose tenure has seen multinationals exit. However, his reforms are showing results, with Coca-Cola also announcing a $1bn investment to expand operations,” he noted.