The Nation Newspaper

Tag: Flour Mills

  • New investors indicate interest in former Dangote Flour Mills

    New investors have shown early interests in acquisition of assets of Tiger Branded Consumer Goods (TBCG) Plc as the foreign core investor in the former Dangote Flour Mills Plc, South Africa’s Tiger Brands Limited, continued to evaluate all options for the restructuring of the lose-spinning Nigerian subsidiary.

    Chief executive officer, Tiger Brands Limited, Peter Matlare, said there have been formal and informal approaches that indicate interests in the former Dangote Flour Mills’ assets but these have neither been evaluated nor any decision taken on the interests.

    He said the board of Tiger Brands would work with all stakeholders to determine the way forward for the newly rebranded Tiger Branded Consumer Goods Plc and any material information and decisions would be communicated to the investing public.

    Tiger Brands had last month announced that it has reached decision not to provide any further financial supports to Tiger Branded Consumer Goods Plc. The decision also coincided with the resignation of chairman of the company, Alhaji Aliko Dangote and other directors including Mr. Olakunle Alake, Mr. Asue Ighodalo and Mr. Arnold Ekpe. Tiger Brands then said it was exploring various alternatives with regard to its investment in Tiger Branded Consumer Goods.

    Matlare explained that Tiger Brands had made significant investments in the former Dangote Flour Mills but the company continued to struggle with losses, which brought the board of Tiger Brands to consider either of two options of further recapitalisation or to find alternative option, the board subsequently settled for alternative options.

    “A variety of options are being considered, which could include a partnership, a sale, a merger, but no decision has as yet been made,” Matlare said in response to questions on whether foreign core investor would consider merging TBCG with its other investments in Nigeria and short-to-long term plans for the troubled Nigerian company.

    He, however, said the foreign core investor was not considering any further increase in its shareholding in TBGC. Many multinationals had in recent period been making efforts to increase their shareholdings in their Nigerian subsidiaries-many below 70 per cent had indicated plans to move to between 70-75 per cent.

    He said the continued listing of TBCG on the Nigerian Stock Exchange will depend on whatever option is chosen for the business, stating that the foreign core investor would not give a commitment that it would sustain the listing of TBCG on the NSE in the light of envisaged corporate restructuring

    He explained that the foreign core investor believed it made the right decision when it acquired the majority stake in the former Dangote Flour Mills (DFM) in 2012, but subsequent events impacted negatively on the fortunes of the company.

    Matlare said the action taken on TBCG must not be mistaken for a vote of confidence on the Nigerian economy pointing out that Tiger Brands still retains substantial investments in Nigeria and would consider any further investment opportunities.

    “We will look at all opportunities and consider them on their merits. This action is not a vote of no confidence in Nigeria, as Tiger Brands retains its 50 per cent interest in UAC Foods and its 100 per cent interest in Deli Foods.  Africa remains fundamental to Tiger’s international growth strategy and we will continue to develop in these markets and invest appropriately to drive penetration. Despite some challenges in our African businesses, expansion in Africa represents a growth opportunity for the group,” Matlare said.

  • Honeywell Flour Mills wins award

    Honeywell Flour Mills wins award

    Honeywell Flour Mills Plc has won the Corporate Awards for Excellence in Human Resources Practice, otherwise known as HR Best Practice Award organised by the Chartered Institute of Personnel Management (CIPM).

    Honeywell Flour Mills,  picked among more than 26 companies from different sectors was adjudged the overall winner of the HR Best Practice Award at the 47th Annual Conference of the CIPM held in Abuja.

    President, Chartered Institute of Personnel Management (CIPM), Mr. Anthony Arabome, commended Honeywell Flour Mills, noting that the company’s emergence as the overall winner is a clear testimony of the integrity and transparency of the evaluation and award process.

    According to him, for an indigenous company like Honeywell Flour Mills to beat major players, both local and multinational, in sectors like oil & gas, telecoms, financial services and manufacturing goes a long way to show that Honeywell is a well-run company, especially from HR perspective.

    “This Award has been given to Honeywell Flour Mills in recognition of its invaluable contributions to the development and advancement of the human resources profession in Nigeria. The evaluation process leading to the Awards involved very rigorous assessments and process audit of human resources practice conducted by Accenture,” Arabome said.

    He said Honeywell Flour Mills like every other company, was assessed on service delivery, creativity, results, integrity, professionalism and team work in the practice of human resources, noting that the company performed excellently in all areas.

    Human Resources Manager, Honeywell Flour Mills Plc, Mr. Tunde Adebayo, while receiving the award on behalf of the company’s managing director, Mr. Lanre Jaiyeola, said the award would further encourage the company to sustain and improve on its good corporate governance.

     

     

     

     

  • Flour Mills mulls job creation, food production

    Flour Mills mulls job creation, food production

    Group Managing Director, Flour Mills of Nigeria Mr. Paul  Gbededo has said the company is planning to create  thousands of jobs and drive growth with the establishment of large-scale farms.

    He said the company is committed to driving productivity and innovation through opportunities offered by markets through the country.

    Gbededo, in a chat, spoke of the company’s performance and projections in the light of the award received from the Lagos Chambers of Commerce and Industry (LCCI) as ‘Award for Impactful Contribution to Economy through Backward Integration’ in the industrial space.

    Gbededo said the company acquired its 10,000ha Kaboji Farm in Niger State about 10 years ago which has grown to become the biggest mechanised maize farm in the country. It uses 4,000ha to grow maize. He added that soybean has been helpful in its vertical integration, which uses the produce at its feedmills in Ibadan and Calabar for feeds for poultry.

    He said the company is dedicated to sourcing its raw materials locally and further the development of the food industry.

    The award is in recognition of the company’s efforts spanning about a decade, when, in the organisation’s plan, backward integration was adjudged the only way to support its food business through local content addition as well as improve food security in Nigeria.

    On backward integration, he said the programme helps to support the group’s manufacturing and processing business.

    For this, the Group Managing Director said it has invested over a billion dollars in the last five years and projects that an equivalent sum would be spent in another five years in the agro-allied business. He added that the company is expanding its portfolio in the agro-allied space because that would grow the local content and help support the food business and strengthen the growth of agriculture, which would provide more jobs in Nigeria.

    On the fall of the naira and impact on the business, Gbededo said there are two sides to the issue of the devaluation of the naira. “In a way, it has put a lot of stress on our ability to bring machinery and spares. It increases the naira cost of those inputs and upsets our projections since we operate in a naira environment – it affects our ability to make profits,” he said.

    However, he pointed out that on the other hand, there is a positive side. According to him, using maize for instance, the commodity sells about N45,000 – N50,000 per metric ton, making locally produced maize to be competitive globally; importing the grain would be at about N60,000, thus making it a possibility to export surplus, if any.

    Gbededo revealed that it does not need to import maize now to run the operations of the processing plants. The company, he said, is now aggregating maize nationwide to help its 350,000 metric ton plants annually. “Except there is a shortfall in supply, we help boost the fortunes of Nigerian farmers in earning more,” he said.

  • Flour Mills to raise N30b from 1.1b rights shares

    •Acquires five subsidiaries

    Flour Mills of Nigeria Plc plans to raise N30.25 billion through a proposed rights issue as it moves to beef up capital base and streamline operations to mitigate macro-economic headwinds.

    The company  would be offering 1.09 billion ordinary shares of 50 kobo each to existing shareholders at N27.50 per share.

    A rights application filed by the  company at the Nigerian Stock Exchange (NSE) indicated that shareholders on register of the company as at the close of business last Wednesday would be pre-allotted five new ordinary shares of 50 kobo each for every 12 ordinary shares of 50 kobo each held.

    Chairman, Flour Mills of Nigeria, Mr. John Coumantaros, said the company would use the net proceeds to cushion the adverse effect of the sudden slump in global crude oil prices, which has resulted in major devaluation of the naira and caused increases in import costs and financial charges.

    Shareholders of the company last month approved resolutions authorising the company to increase its authorised share capital and raise about N40 billion new equity funds from existing shareholders.

    The extraordinary general meeting of shareholders increased the company’s authorised share capital from N2 billion to N2.5 billion through the creation of additional 1.0 billion ordinary shares of 50 kobo each. In the event of under-subscription, the board also received shareholders’ mandate to allocate unsubscribed rights’ shares to interested investors. Shareholders also empowered the board of directors to use net proceeds of the rights issue to meet the funding requirements of the company.

    In a related development, Flour Mills has received the approval-in-principle of the Securities and Exchange Commission (SEC) to acquire five of its subsidiaries in a major restructuring aimed at reducing costs.

    The five wholly-owned subsidiaries included Golden Noodles Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited. They will be merged with Flour Mills of Nigeria Plc. The restructuring is expected to be concluded in October 2015.

    Group Managing Director, Flour Mills of Nigeria, Mr. Paul Gbededo said the group was undertaking the restructuring to streamline its operations, reduce administrative costs, improve operating efficiency and derive full benefits of synergy in line with the company’s long term strategic thrust.

    According to him, after the completion of the restructuring, the enlarged company would be able to eliminate transfer costs of materials and operate at a higher level of efficiency, which will drive down costs, make product pricing more competitive, improve profitability and enhance the bottom line for the benefit of all stakeholders.

    Company Secretary, Flour Mills of Nigeria Plc, Alhaji Olalekan Saliu, said the management of the various companies had jointly obtained an order of the Federal High Court directing that a court ordered meeting of their respective shareholders be held on Wednesday, September 9, 2015 for the purpose of approving the restructuring.

    The company noted that where the shareholders give the requisite approval, the final approval of SEC would be sought and the Federal High Court will thereafter be approached to sanction the merger.

    Flour Mills distributed N5.51 billion, about 65.13 per cent of the company’s net profit, as cash dividends to shareholders for the immediate past year ended March 31, 2015. Shareholders received a dividend per share of N2.10 after proceeds from disposal of assets and tax gains helped the bottom-line to a positive close.

    Key extracts of the audited report and accounts of Flour Mills for the year ended March 31, 2015 showed visible decline in the operational performance of the company, but tax earnings boosted the net profit for the year.

    Total sales dropped to N308.76 billion in 2015 as against N325.79 billion in 2014. Gross profit also declined from N37.30 billion in 2014 to N35.37 billion in 2015. Operating profit slumped to N10.22 billion in 2015 compared with N19.38 billion in 2014. With decline in investment income from N5.03 billion to N2.3 billion and increase in interest expense from N16.10 billion to N18.70 billion, Flour Mills was primed for a loss during the year.

    However, the company’s bottom-line was mitigated by a N14.29 billion gain from disposal of investment from an associate company and a N738.3 million tax income gain. Profit before tax still closed lower at N7.72 billion in 2015 as against N8.23 billion in 2014. With the tax gain, profit after tax rose from N5.37 billion to N8.46 billion. Earnings per share thus stood at N3.47 in 2015 as against N1.93 in 2014.

    Flour Mills had recently embarked on group restructuring, strategic business acquisitions and investment in its core food business and backward integration programmes. It commissioned 750,000 metric tons per annual sugar refinery built at a cost of $250 million in April 2013.

    It has also continued to strategically invest in large scale commercial farming to support its food processing units with locally produced raw materials. The group had invested about N41 billion in capital projects in recent period including key projects such as flour capacity expansion in its Apapa mills, completion of Golden Snacks facility in Agbara, completion of Golden Sugar Refinery, establishment of new flour mill in Calabar, expansion of pasta & noodles lines and many major agro allied projects such as investments in Sunti Golden Sugar Estates and new animal feed mill and acquisition and development of large scale commercial farming.

  • Flour Mills declares N5.5b dividends

    Flour Mills declares N5.5b dividends

    The board of directors of Flour Mills of Nigeria Plc has recommended distribution of N5.51 billion, about 65.13 per cent of the company’s net profit, as cash dividends to shareholders for the immediate past year ended March 31, 2015.

    In a dividend recommendation released yesterday, directors of the flour-milling company said shareholders would receive a dividend per share of N2.10 after proceeds from disposal of assets and tax gains helped the bottom-line to a positive close.

    Key extracts of the audited report and accounts of Flour Mills for the year ended March 31, 2015 showed visible decline in the operational performance of the company but tax earnings boosted the net profit for the year.

    Total sales dropped to N308.76 billion in 2015 as against N325.79 billion in 2014. Gross profit also declined from N37.30 billion in 2014 to N35.37 billion in 2015. Operating profit slumped to N10.22 billion in 2015 compared with N19.38 billion in 2014. With decline in investment income from N5.03 billion to N2.3 billion and increase in interest expense from N16.10 billion to N18.70 billion, Flour Mills was primed for a loss during the year.

    However, the company’s bottom-line was mitigated by a N14.29 billion gain from disposal of investment from an associate company and a N738.3 million tax income gain. Profit before tax still closed lower at N7.72 billion in 2015 as against N8.23 billion in 2014. With the tax gain, profit after tax rose from N5.37 billion to N8.46 billion. Earnings per share thus stood at N3.47 in 2015 as against N1.93 in 2014.

    In 2014, Flour Mills had distributed N5.01 billion as cash dividends on the basis of N2.10 per each ordinary share. Also, a total of 238.6 million ordinary shares of 50 kobo each were also distributed to shareholders through a bonus of one for 10 shares.

    Flour Mills last week received shareholders’ nod for a N40 billion rights issue, which the company plans to use to bolster its working capital and restructure its leveraged balance sheet in order to avoid long drain of financial mismatch.

    Shareholders of Flour Mills, Nigeria’s most capitalised and largest flour-milling company, also last week approved increase in the authorised share capital of the company. Shareholders approved increase in authorized share capital of the company from N2 billion to N2.5 billion through the creation of additional 1.0 billion ordinary shares of 50 kobo each. Besides approving the N40 billion rights issue, the meeting also granted a waiver to the board that in the event of under-subscription, the board can allocate unsubscribed rights’ shares to interested investors.

    The meeting generally mandated the board of directors to use net proceeds of the rights issue to meet the funding requirements of the company.

    Chairman, Flour Mills of Nigeria, Mr. John Coumantaros, said the company would use the net proceeds to also cushion the adverse effect of the sudden slump in global crude oil prices, which has resulted in major devaluation of the naira and caused increases in import costs and financial charges.

  • Why we need N40b new equity funds, by Flour Mills

    Flour Mills of Nigeria Plc plans to use the net proceeds of its impending N40 billion rights issue to bolster its working capital and restructure its leveraged balance sheet to avoid long drain of financial mismatch.

    Shareholders of Flour Mills, Nigeria’s most capitalised and largest flour-milling company, met last week at an extraordinary general meeting and approved increase in the authorised share capital of the company and a proposal to raise about N40 billion new equity funds from its shareholders.

    Shareholders approved increase in authorised share capital of the company from N2 billion to N2.5 billion through the creation of additional 1.0 billion ordinary shares of 50 kobo each. Besides approving the N40 billion rights issue, the meeting also granted a waiver to the board that in the event of under-subscription, the board can allocate unsubscribed rights’ shares to interested investors.

    The meeting mandated the board of directors to use net proceeds of the rights issue to meet the funding requirements of the company.

    Chairman, Flour Mills of Nigeria, Mr. John Coumantaros, highlighted the need for the new equity funds, urging shareholders to support the quest to further capitalise the company.

    According to him, the net proceeds would be used to reduce the company’s debt burden and resultant interest charges as well as to increase working capital to support recent investments.

    He noted that with the additional capital, the company would be in a stronger position to pursue high growth business opportunities without the risk of high financial leverage or mismatch.

    “You will recall that during the last five years, Flour Mills had embarked on a major expansion programme in our core food, agro allied, logistics and support businesses. We also undertook strategic acquisitions and mergers. These were aimed at strengthening, consolidating, re-focusing and supporting our core food business,” Coumantaros said.

    He said the company would be using the net proceeds to also cushion the adverse effect of the sudden slump in global crude oil prices, which has resulted in major devaluation of the naira and caused increases in import costs and financial charges.

    He said the company would be making “a very big investment programme” to improve its local manufacturing capacity noting that the foreign exchange market has increasingly become tough.

    He outlined some of the recent investments by the company to include the inauguration of a new sugar refinery at Apapa; the development of a 10,000-hectare sugar estate and mill in Sunti, Niger State; and an ultra-modern pasta factory at Agbara, Ogun State, among others.

    According to him, most of these projects are now operational and making steady and impressive progress.

    He expressed optimism that these investments would deliver good returns, positive cash flow and continue to make appreciable contributions to the group’s earnings and profit in the years ahead.

    In 2014, Flour Mills had distributed N5.01 billion as cash dividends on the basis of N2.10 per each ordinary share. Also, a total of 238.6 million ordinary shares of 50 kobo each were also distributed to shareholders through a bonus of one for 10 shares.

    Key extracts of the audited report and accounts of Flour Mills for the year ended March 31, 2014 showed that turnover rose from N301.94 billion to N332.14 billion. Profit after tax however dropped from N7.54 billion in 2013 to N5.37 billion.

    Flour Mills had recently embarked on group restructuring, strategic business acquisitions and investment in its core food business and backward integration programmes. It commissioned a 750,000 metric tons per annual sugar refinery built at a cost of $250 million in April 2013.

    It has also continued to strategically invest in large scale commercial farming to support its food processing units with locally produced raw materials. The group had invested about N41 billion in capital projects in recent period including key projects such as flour capacity expansion in its Apapa mills, completion of Golden Snacks facility in Agbara, completion of Golden Sugar Refinery, establishment of new flour mill in Calabar, expansion of pasta & noodles lines and many major agro allied projects such as investments in Sunti Golden Sugar Estates and new animal feed mill and acquisition and development of large scale commercial farming.

  • Flour Mills celebrates customers, launches new products

    Flour Mills celebrates customers, launches new products

    Flour Mills of Nigeria Plc has held its Golden Penny Customers’ Forum in Lagos.

    At the event,  its customers were rewarded for their loyalty to the company and its products.

    It was also an opportunity for the company to share information on its plans.

    Such plans include the launch of three new products – Daily Delight Instant Cereal, Golden Penny Margarine and Golden Penny Vegetable Oil, which were unveiled and are available in the market and in stores.

    Group Managing Director, Flour Mills of Nigeria Plc, Mr. Paul Gbededo, said the occasion was unique because it was the first time Golden Penny Business partners of both B2B and B2C are rewarded the same day as one Team with One Dream.

    He referred to the customers as partners because without them the company was not complete hence the need to celebrate them. He added that the company has continued to maintain leadership through production of quality, healthy and affordable products to meet the demand of the growing population.

    The company’s Chairman, Mr. John Coumantaros, said the forum was to appreciate the distributors for their unwavering loyalty and commitment in the past 54 years which has seen Golden Penny brands remain the number one family’s choice in Fast Moving Consumer Goods (FMCG) segment in Nigeria.

    Coumantaros said the customers of new brands that would be introduced into the market during the year. He reiterated the company’s plan to make Golden Penny brands the first choice for consumers by meeting the needs of all age groups in Nigeria and West Africa.

    Mega Food Basket Distributors were rewarded with mouth-watering gifts ranging from Sport Utility Vehicles (SUVs), overseas trips, to the latest 4K Smart TVs.

  • Flour Mills to raise N40b

    Flour Mills to raise N40b

    Flour Mills of Nigeria Plc, Nigeria’s most capitalised and largest flour-milling company, plans to raise about N40 billion from existing shareholders as the flour miller seeks to consolidate recent investments and support ongoing corporate restructuring with long-term funds.

    In a regulatory filing yesterday, the board of directors of Flour Mills said it was calling shareholders to an extraordinary general meeting next month to discuss and approve resolutions on increase in authorized share capital of the company and a rights issue.

    The board of director is proposing increase in authorized share capital of the company from N2 billion to N2.5 billion through the creation of additional 1.0 billion ordinary shares of 50 kobo each.

    The company then plans to raise up to N40 billion in new equity funds from existing shareholders. In the event of under-subscription, the board is seeking shareholders’ mandate to allocate unsubscribed rights’ shares to interested investors.

    Shareholders are also expected to empower the board of directors to use net proceeds of the rights issue to meet the funding requirements of the company.

    Flour Mills’ share price remained unchanged at N35 per share at the Nigerian Stock Exchange (NSE), where the overall market trend was negative. The benchmark index at the NSE indicated average decline of 0.29 per cent yesterday. Over the past 52 weeks, Flour Mills’ share price has traded between a high of N73.55 and a low of N26.60.

    In 2014, Flour Mills had distributed N5.01 billion as cash dividends on the basis of N2.10 per each ordinary share. Also, a total of 238.6 million ordinary shares of 50 kobo each were also distributed to shareholders through a bonus of one for 10 shares.

    Key extracts of the audited report and accounts of Flour Mills for the year ended March 31, 2014 showed that turnover rose from N301.94 billion to N332.14 billion. Profit after tax however dropped from N7.54 billion in 2013 to N5.37 billion.

  • FBN Holdings, UBA, Flour Mills are the best stocks to buy, say analysts

    FBN Holdings, UBA, Flour Mills are the best stocks to buy, say analysts

    Investors seeking to more than double their money within the next 12 months should consider stakes in FBN Holdings Plc, United Bank for Africa (UBA) Plc and Flour Mills of Nigeria Plc, according to analysts at Afrinvest Securities.

    In the latest review of the Nigerian stock market, analysts at Afrinvest Securities indicated that while the equities market had started on a tumultuous note, there are significant buy opportunities in the stock market as several stocks have potential to make between double and three-digit percentage returns over the next 12 months.

    Analysts said FBN Holdings, UBA and Flour Mills have the greatest potential in terms of capital appreciation. FBN Holdings was estimated to have the possibility of appreciating by 177.5 per cent during the period. UBA also has potential upside value of 174.7 per cent while Flour Mills was expected to grow by as much as 171.9 per cent.

    According to analysts, FBN Holdings’ share price could rise to N22.17 over the next 12 months while UBA and Flour Mills could be trading at N10.41 and N96.20 respectively.

    FBN Holdings opened this week at N7.99 while UBA and Flour Mills started trading at N3.79 and N35.38 respectively.

    Other stocks with potential for three-digit growth included FCMB Group Plc, with possible appreciation of 162.6 per cent, Diamond Bank, 133.1 per cent; Access Bank, 124.8 per cent; Skye Bank, 120.8 per cent; Aiico Insurance, 117.9 per cent and Dangote Sugar Refinery, which has upside potential of 109.6 per cent.

    Investors in Nigerian equities started this year with the unnerving hangover of the previous year as quoted equities lost about N1.5 trillion in the first week of the New Year. With consecutive decline all through the five trading sessions, last week saw most equities dropping to their lowest levels.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) closed last week at a low of N9.980 trillion as against its opening value of N11.478 trillion, representing a loss of N1.498 trillion. The benchmark index at the NSE, the All Share Index (ASI)- a value-based index that tracks prices of all quoted equities and also doubles as country index for Nigeria, indicated a week-on-week average decline of 13.05 per cent. The ASI dropped from its opening index of 34,657.15 points to close at 30,143.02 points.

    The performance of quoted equities last week raised the spectre of the previous year. Nigerian equities ranked among the worst-performing stocks globally in 2014 with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities closed 2014 at N13.226 trillion as against its opening value of N11.477 trillion for the year, indicating a loss of N1.75 trillion during the year.

    Analysts at Afrinvest attributed the bearish market situation to weak macroeconomic fundamentals pointing out that the steep decline in crude oil price and increasing Nigeria’s vulnerability were making investors to be anxious.

    Afrinvest’s stock recommendation may further encourage investors’ participation in the ongoing supplementary issue by UBA. UBA is raising funds from existing shareholders through a rights issue of one for 10 ordinary shares held as at October 15, 2014. The offer price is N4. Application for the rights issue, which opened on December 29, 2014, will close on February 5, 2015.

    UBA plans to use the net proceeds of the N13b rights issue to strengthen its business units across Africa.

    UBA had in 2013 launched a new business development plan aimed at consolidating the bank’s position as a leading pan-African global financial services group. The three-year business development plan codenamed Project Alpha was designed as the group’s next focus of strategic transformation and it contained key transformation initiatives.

    Group managing director, United Bank for Africa (UBA), Mr. Phillips Oduoza, said the new business plan was designed to consolidate the group’s strategic positioning and fully capture the opportunities from Africa’s economic renaissance.

    According to him, Project Alpha is focused on leveraging all aspects of the group’s footprint, product offerings and operational capability, allowing a commitment to customer service transformation, market share growth, the implementation of key e-banking initiatives across all segments, the growth of corporate and trade finance capabilities.

    He outlined that a critical aspect of the Project Alpha initiative is the focus on UBA Africa, which is projected to contribute about 50 per cent to the group by 2016.

     

  • Flour Mills to generate 12.5mw with GE’s diesel engine

    The general Electric (GE)’s  distributed power business arm has said the United Kingdom (UK)-based power provider, Clarke Energy, is supplying its new diesel engines to Flour Mills of Nigeria Plc for the generation of 12.5 megawatts, enough for 33,000 homes.

    The deal will solve the energy needs of the company, reduce pressure on supply from the national grid and encourage growth in the sector.

    This deal, according to the company, was the first sale of GE’s new 616 diesel engine globally. The engine delivers higher fuel efficiency and extended service intervals than many other engines. Clarke Energy said this at the East African Power Industry Convention in Nairobi, Kenya.

    “As Nigeria continues to grow its industrial might in the global economy, we have opted to invest in GE’s new 616 diesel engines to deliver higher fuel efficiency at our sites in Lagos and Kano. We have been working with Clarke Energy since 2005, and we are confident in its ability to support us in the engineering installation and maintenance of the units,” said Flour Mills’ Chief Executive Officer,   Paul Gbededo,

    The company’s  project will include five of GE’s 616 units, delivering up to 12.5 megawatts (MW) of power. Two of the units will be used at the Kano facility in northern Nigeria, where natural gas access is limited and where older, less-efficient diesel units have been used in order to maintain power for production. The new GE engines will deliver 5 MW of baseload electrical power, with an expected capital payback in less than 12 months on diesel fuel cost savings alone.

    The other three GE engines will be at Flour Mills’ facility in Apapa, where Clarke Energy opened its first sub-Saharan Africa site about a decade ago. This site features 11 GE’s J620 gas engines, and the diesel units will provide back-up capacity during the  maintenance of its equipment or in the event of supply failure.

    “The sale of the engines to our valued long-term customer Flour Mills of Nigeria demonstrates the significant benefits of reduced fuel consumption and extended maintenance intervals from GE’s new 616 diesel platform,” said Alan Fletcher, main board director, Clarke Energy.

    Clarke Energy, he said, has had a long history in sub-Saharan Africa. Its first office was opened in 2005 in Apapa, Lagos, and over 250 MW of gas-fueled power plants have since been installed to meet expansion of Nigeria’s domestic gas supplies. Since inception, Clarke Energy’s Nigerian operations have expanded and moved to Ikeja GRA, opening a new branch office in Port Harcourt in 2012.

    GE’s 616 diesel engine is based upon the highly successful Jenbacher Type 6 reciprocating engine and GE Transportation’s P616 locomotive diesel engine. The engine’s design is characterised by its world-class efficiency and extended maintenance intervals, which result in lower fuel consumption and higher levels of availability.

    “Our new 616 diesel engine is the first high-speed model for power generation, allowing us to serve customers with a wider reciprocating engine portfolio. We are honoured by the trust Flour Mills of Nigeria has extended to Clarke Energy and GE as collaborators in providing power generation for their growth. Flour Mills will benefit from the 616, which couples medium-speed engine fuel economy with the lower costs of high-speed engines and helps customers improve their total life cycle costs,” said Cory Nelson, general manager, diesel engines of GE’s Distributed Power business.

    GE Power & Water’s Distributed Power business is a leading provider of power equipment, engines and services, focused on power generation at or near the point of use. Distributed Power’s product portfolio includes GE’s aeroderivative gas turbines and reciprocating engines, which generate 100 kilowatts to 100 MW of power for numerous industries globally.