Chairman John Coumantaros underscored during an interview on Tuesday that this novel investment signifies a substantial dedication to Nigeria.
This funding initiative will support President Bola Tinubu’s reform agenda, particularly as some companies, including Diageo Plc and Unilever Plc, are either withdrawing or scaling back their operations in the West African market. Since assuming office in May 2023, Tinubu has implemented various reforms, such as allowing the naira to float freely and reducing fuel subsidies, aimed at making Nigeria more appealing to investors and averting a fiscal crisis.
Flour Mills plans to allocate at least $500 million to enhance its sugar production in Niger state, aiming to increase output from the current 100,000 tons to over 400,000 tons annually, according to Coumantaros. Additionally, $100 million will be invested in establishing a cassava-processing facility to eliminate the need for starch imports, while the company also intends to broaden its breakfast cereal range.
The 64-year-old firm will undergo reorganization following Excelsior Shipping Company Ltd.'s recent offer to acquire minority shares at 70 naira each.
Coumantaros stated that the company aims to consolidate its more than 22 divisions into five distinct entities. “We seek to attract both technical and financial partners to support the growth of our sugar and food sectors. We have ambitious plans for investment and expansion,” he noted.
Most of the capital required will be generated internally, Coumantaros added. “The demand for capital will be substantial, and we will be responsible for a significant portion of that,” he stated.
He encouraged the government to consider providing support for local investment and development through reduced interest rates. “While we recognize that high interest rates are essential at this moment, it becomes exceedingly challenging to establish industries and invest in new ventures when interest rates reach 30%,” he stated.
In an effort to combat persistent inflation, which currently stands at 32.7%, the central bank has more than doubled the key interest rate to 27.25% over the past two years.
Flour Mills aims to expand its operations across the continent, beginning in West Africa, and plans to utilize the African Continental Free Trade Area (AfCFTA). Once fully operational, the AfCFTA will represent the largest single market by area since the establishment of the World Trade Organization.
“With the launch of the AfCFTA, we firmly believe that our focus should extend beyond the Nigerian market,” the chairman remarked. “Our vision is to create a pan-African food enterprise based in Nigeria. We intend to leverage the AfCFTA to broaden our presence in these regions.”
Coumantaros envisions the company’s relisting following its strategic repositioning.
“It is our goal to return to the market,” he noted, “and to potentially list in Nigeria, possibly as a dual listing for a pan-African food or agro-allied business. We believe the Nigerian Stock Exchange has a vital role in our future, but we must reorganize, retool, recapitalize, and refocus to reach that stage.”
The stock remained steady at 62 naira per share at the close in Lagos on Thursday, having increased by 87.6% this year, in contrast to a 31.2% rise in the 151-member NGX All Share Index.