Olam Nigeria has announced that its Singapore-based holding company, Olam International Limited, is investing N54 billion ($275 million) in Nigeria’s wheat milling and pasta manufacturing industry.
The investment was for the acquisition of Amber Foods Limited, which through its 100 percent owned subsidiary, Quintessential Foods Nigeria Limited, owns the wheat milling and pasta manufacturing assets of the BUA Group in Nigeria.
The BUA Group, a diversified foods and infrastructure business group in Nigeria, is among the top five wheat millers in the country with wheat milling and pasta manufacturing capacities of 3,760 and 700 metric tonnes per day (TPD) respectively.
The assets to be acquired include two wheat mills and a pasta manufacturing facility in Lagos, a mill in Kano, and a wheat mill and a pasta manufacturing plant under construction in Port Harcourt.
The wheat milling sector in Sub-Saharan Africa has been an area of investment focus for Olam since 2010 when it acquired Crown Flour Mills (CFM) in Nigeria.
Since then, Olam has expanded Crown Flour Mills capacity and set up milling operations in Ghana, Senegal and Cameroon.
This acquisition will strengthen Crown Flour Mill’s position as the number two wheat miller by sales volume and make it a leading pasta player in Nigeria.
Crown Flour Mill’s total wheat milling capacity in the country will increase from its current 2,380 TPD to 6,140 TPD once the facilities in Port Harcourt are completed in June 2016.
Mukul Mathur, country head of Olam Nigeria, said the company is confident of its prospect in Nigeria.
“We are confident about the growth prospects in Nigeria, so expanding our participation here is a logical step to capitalise on the opportunity. Our value-added export business in the country puts us in a strong position to generate the much required forex and actively support the Produce-Add-Value-Export (PAVE) initiative of the federal government of Nigeria,” he said.
Anurag Shukla, managing director of Crown Flour Mills, added that the acquisition wouldhelpit “provide low cost food staples to the Nigerian population that have been manufactured in-country”.
“Wheat-based products, such as pasta, have grown in popularity among Nigerians due to changing tastes, the gradual rise of convenience and, for many, as an affordable option to meet carbohydrate requirements.
“We are pleased to acquire the BUA Flour and BUA Pasta brand. Both brands are very well known and respected in the industry and we look forward to further developing them and increasing their reach across Nigeria, leveraging our extensive sales and distribution network.
“We will also invest in building the skills and capabilities of our employees and in providing a safe working environment.”