FMN to expand production facility with $1b investment over four years

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

The company’s Chairman, John Coumantaros, disclosed this recently, emphasising that this reflects a commitment to increasing their investment in Nigeria. According to Coumantaros, the company plans to invest $500 million into its sugar operations in Niger State, to increase production from the current 100,000 tons to over 400,000 tons yearly.

Additionally, they will allocate $100 million to establish a cassava-processing plant aimed at eliminating cassava starch imports. In the full year of 2023/2024, the company said it expended N1.8 trillion on raw materials sourcing, resulting in its profit declining by 91 per cent.

Coumantaros also touched on plans to expand their breakfast cereal product line and further explained that most of the funding will be internally sourced. “The requirement for capital is going to be large, and of course, we will be backing most of it. 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 and bring some of that technical expertise so we can add more business, more jobs here in the country,” he said.

The company also plans to restructure its operations after local partner, Excelsior, offered to buy out its minority stake and go private. The company also plans to restructure its over 22 business units into five separate companies, according to Coumantaros.

“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 said.

Beyond that, he also disclosed that they’re looking at leveraging the Africa Continental Free Trade Area (AfCFTA) to expand across the continent starting from West Africa. “With AfCFTA, we believe that we shouldn’t be looking at the Nigerian market alone and our dream is to have a pan-African food business headquartered in Nigeria. We’ll take advantage of the AfCFTA so that we can expand our footprint across Africa.”

According to him, this will likely include a dual listing on the NGX and other stock market. He expressed the company’s intention to relist after it undergoes repositioning, noting that its ultimate goal is to return to the market, potentially with a dual listing as a pan-African food or agro-allied business.

Stressing that the Nigerian Stock Exchange would play a crucial role in their future, he said the company first needed to reorganise, retool, recapitalise and refocus to be ready for such a move.

This investment is coming on the heels of BUA Foods Plc’s recent announcement of its desire to expand its wheat flour milling capacity to 2.5 million MTpa. It would be recalled that BUA Foods signed an agreement with IMAS, a Turkish flour milling equipment manufacturer, to build four state-of-the-art wheat and flour milling factories with a cumulative milling capacity of 3,200 tonnes per day.