Management lauded as Honeywell expands operation

To complete pasta factory by end of year

Shareholders of Honeywell Flourmills Plc (HFMP) has commended the company’s efforts in ensuring that the firm remains on the path of growth. They especially commended the building of the new pasta factory, which is to be completed by the end of the current financial year.

The shareholders, who spoke during the company’s seventh yearly general meeting held in Lagos, yesterday, also urged them to continue to support the local sourcing of raw materials.Specifically, the President, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu, commended the company on the new, ultra-modern pasta factory.

He described the on-going project as a strategic initiative, adding that it would help the company further grow market share; increase revenue significantly and support the realisation of its backward integration strategy on completion.

The National Cordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie said: “they have done well despite the headwinds especially in turnover, the factory by second quarter would be put into production, rolling out a lot of product.

“ It is a big expansion is in 63 hectares of land going to house other companies that will operate there and paying the company, I think solid foundation has been laid for shareholders, it is money spinning.”

Reviewing its performance, the Chairman of the company, Oba Otudeko, said: “There were series of challenging factors that led to increased uncertainty and rising cost pressures in the Nigerian economy.

“Consumer spending progressively dropped throughout the operating period under review. Prices  of  most consumer  goods  rose  sharply  in response  to  higher  input  costs. In our case, we have only taken modest price increases to ensure our brands remain affordable and to sustain food security.”

The Chairman explained that the firm recorded a four percent growth in revenue while total assets also increased by 12 percent from N67.94 billion reported in 2015 to N76.05 billion, largely due to the company’s capacity expansion projects.

He, however, noted that the company recorded a loss for the first time in its 20-year history amounting to N2.87 billion before taxes, occasioned by adverse effects of forex fluctuations which impacted input costs.

According to him, the company is embarking on several strategic initiatives to grow revenues and reduce costs. He added that the firm’s key revenue growth strategy would be focused on backward integration that would result in the production of more products from locally grown crops.

“The new state-of-the-art, multi-billion Naira facilities in our foods and agro-allied industrial complex in Sagamu, Ogun State, nearing completion, will go a long way in supporting us to actualise our backward integration plans”.

Otudeko explained that the new factory would increase its pasta production capacity by over 100 per cent, vast enough to produce innovative pasta types for the delight of its numerous customers.

He added that the firm is working with both local and international agricultural development organisation to develop out-grower schemes with local farmers in Nigeria, to explore the use of local grains in flour production.

“We are committed to ensuring that we produce affordable and nutritious foods for Nigerians and to increase raw materials purchases from sustainable local sources. The company will also continue to invest  in  new  product  research  and  development  to  enable  the production of more  varieties  of  food  products  for  its teeming  consumers.”

He expressed optimism that the management of the company is determined to do everything within its powers to prevent a reoccurrence of this unanticipated dip in the company’s earnings and steer the company back to the path of profitability.

“HFMP is committed to continuous achievement of business success by maintaining its leadership in Nigeria’s flour milling industry. This will be driven by topnotch strategic decisions to ensure that consumers are always provided with highly nutritious, top quality and affordable food products,” he added.

The Managing Director of the company, Olanrewaju Jaiyeola, explained that the company has streamlined its cost structure, even as the firm has commenced the development of several projects to entrench continuous improvement and innovations across the business.

“The company developed some strength in operational efficiency in the financial year ended March 2016. We have found even greater strength in controlling costs.

‘We embarked on several strategic projects to reduce cost. One of the most important steps we took was to begin the process of developing local sources and partnerships for raw materials within the context of our backward integration strategy.’’