The Nation Newspaper

Tag: Flour Mills

  • Flour Mills to invest in rice production

    Flour Mills to invest in rice production

    Flour Mills of Nigeria (FMN) will soon invest in the production and processing of locally grown rice through the participation of local farmers and other stakeholders in the supply chain.

    The company’s Group Managing Director Paul Gbededo, spoke in Lagos.

    “Nigeria consumes about 4 million metric tonnes of rice and we need about 1 million acres of land to achieve that. We want to start aggregating by involving others in the supply chain,” said Gbededo.

    FMN, which used to produce wheat-based products, initially began its rice business in 2009 by importing par-boiled rice into Nigeria. In 2010, the company constructed a rice mill which had the capacity to process brown rice to par-boiled rice.

    “We are commissioning and improving our capacity utilisation. Our new investments and projects are reaching maturity.”He further stated that the production of rice was affected by the tariff on its import as imported rice was cheaper than rice produced locally. He said that the increase in import tariff would also enhance its profit margin.

    Gbededo continued: “We are commissioning and improving our capacity utilisation. Our new investments and projects are reaching maturity.

    “We would start production at the 350,000 metric tons per annum edible oil processing company in Ibadan by the end of this year, our snack business is reaching maturity with the completion of Golden snack facility in Agbara, the $250m Golden sugar investment, our oil palm processing, all these investments would start impacting on the bottom line moving forward.”

    FMN saw a 22.45 percent appreciation in its profits for  last  year.

  • Flour Mills pledges sustained growth

    Flour Mills pledges sustained growth

    Flour Mills of Nigeria Plc yesterday outlined its growth strategy to the investing public with assurance that continuing investments and expansion of its businesses would continue to put the group on the pedestal for sustained growth in the years ahead.

    At the presentation of “Fact Behind the Figure” at the Nigerian Stock Exchange (NSE) in Lagos, group managing director, Flour Mills of Nigeria Plc, Mr. Paul Gbedebo, said the group has been able to retain good margins on all its lines of businesses in spite of increased competition, thus in a better position to support its expansion.

    He noted that the group has restructured and increased investment in its sugar company, which led to successful commissioning of a 750,000 metric tons per annual sugar refinery built at a cost of $250 million in April 2013.

    According to him, in furtherance of the its long term business model and growth strategy, Flour Mills had embarked on group restructuring, strategic business acquisitions and investment in its core food business and backward integration programmes.

    He pointed out that the immediate past year was a year of transition and steady progress is expected in the years ahead as the investments kick in adding that its sugar refining subsidiary and the packaging business are well position for future progress.

    “The group is generating strong cash flow from operating activities and is comfortably positioned for future growth,” Gbedebo assured.

    According to him, Flour Mills has continued to strategically invest in large scale commercial farming to support its food processing units with locally produced raw materials.

    He outlined that 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.

  • 18 firms raise N225.3b bonds in eight years

    18 firms raise N225.3b bonds in eight years

    In the rush to raise corporate bonds, 18 companies have issued N225.38 billion corporate bonds in eight years in 23 deals.

    According to documents accessed from the Debt Management Office (DMO) by The Nation, UBA Plc issued the largest bond value in two installments of N20 billion in 2010 and N35 billion in 2011. Both bond insurances had 13 and 14 per cent coupon values with seven years’ maturity date.

    Flour Mills of Nigeria Plc issued the single largest corporate bond worth N37.5 billion. The bond, which was issued in 2010, had a coupon value of 12 per cent with five years tenure thus putting its year of maturity at 2015.

    The Federal Mortgage Bank of Nigeria (FMBN) did not want the private sector to  overrun the corporate bonds market, so in 2012 it issued a N30.56 billion bond with a 17.25 coupon and five years’ maturity tenor.

    Others in the elite 23 corporate bonds issuers between 2005 and 2013 were Acess bank (N1.9 billion), Crusader Nigeria Plc (N4 billion), Custodian and Allied Insurance Plc (N1.17 billion), C and I Leasing Plc (N2.24 billion and N0.94 billion), Guaranty Trust Bank Plc (N13.17 billion), NGC Sterile (N2 billion), UACN Property Development Company Plc (N15 billion).

    Chellarams Plc issued (N1.5 billion and N0.54 billion) corporate bonds in 2010 and 2012; Dana Group (N8.01 billion), Sterling Bank (N7.5 billion), Lafarge/WAPCO Nigeria Plc (N11.88 billion), Nigeria Aviation Handling Company Plc (N15 billion and N2.05 billion), Tower Funding (N4.63 billion), Crusader Insurance (N2.26 billion, zero coupon), First Securities Discount House (N5.53 billion) and La Casera (N3 billion).

    On the other hand, six banks issued Corporate Eurobonds in the International Capital Market (ICM) valued at $3.4 billion between January 2011 and this month.

    Some of the banks are Guaranty Trust Bank ($500 million and $400 million), Access Bank ($350 million and $400 million), Fidelity Bank ($300 million), Zenith Bank ($500 million), Diamond Bank ($200 million) and First Bank ($450 million and $300 million).

  • Rotary, Flour Mills lift schools

    The Rotary Club of Ogba, Lagos State, in conjunction with Flour Mills Plc, have donated more than 50,000 stationery items to students of Agidingbi Senior Grammar School and Oke-Ira Junior Grammar School in the state.

    Besides, the Oke-Ira junior school got a new desktop computer from the club as each pupil smiled home with five exercise books and pens.

    The club’s president, Samson Omodara, said it had given a similar gesture when it donated waste bins to the senior school, and a borehole with toilet to the junior one.

    The team inspected the projects and discovered that the toilets at the Oke-Ira Junior School had degenerated pitiably.

    Not only were they non-functional, there was water wastage as the pipes leaked and water was gushing out ceaselessly, rendering the environment squalid.

    Omodara urged the pupils to join the Interact Club, as a platform for the younger ones to imbibe the service of the Rotary to not only give back to the society, but also to network with people who can add value to their lives.

  • Flour Mills rewards distributors

    Flour Mills rewards distributors

    Flour Mills of Nigeria Plc, makers of Golden Penny Products has rewarded its distributors at its  Golden Penny Customers Forum at Eko Hotel & Suites, Lagos.

    The theme of the event was: Driving growth.

    Its Chairman, Mr. John Coumantaros, said the forum was aimed at appreciating the distributors for their loyalty and commitment to Golden Penny Products, thereby making it the number one in the industry.

    Its Group Managing Director, Mr. Paul Gbededo, thanked the distributors for their loyalty, promising that the firm would continue to show appreciation to them. He urged them to strive to sell more of its products.

    He added that the firm in the last two years entered the snack market with Marios Cheese balls and Noodies Snacks in recognition of the need to provide quality, nutritious and hygienically prepared ready-to eat snacks for the mobile consumer.

    He informed the distributors that more snack products with flavours would be launched soon, to meet the desire of its consumers. The plan is to make Golden Penny brands the first choice for consumers.

    Gbedebo said: “As one of the largest agro-allied initiatives in Nigeria, Flour Mills has invested over N220 billion in our agro-allied businesses which extend to large scale cultivation of soybean, maize, palm, rice, and cassava. From cultivation, we are also processing these raw materials into animal and fish feed, edible oils, rice, sugar and high quality cassava flour in different parts of the country.”

     

     

    According to him, our quest to build a diversified and profitable portfolio is driven by the need to satisfy our consumers and customers and our objective is to make our customers, a one-stop shop for many of the major food and nutrition needs of bakers, confectioners, industrial processors and consumers. Flour Mills desires to build one of the biggest food companies in Africa.

    On the occasion, awards were given to Distributors on regional and national level. Outstanding sales personnel were equally rewarded. The star prize of Ford Explorer SUV 2014 Model was given to Mount Olive Enterprises as the Number One Customer for the year 2014. All distributors present also went home with a generating set.

    The GMD assured the distributors that FMN was building an enduring food business, driven by a passion for excellence, great products, great quality and the highest standards of service adding that the company would continue to be responsive to the customers’ needs and work with them as partners in progress.

  • Flour Mills reassures on earnings outlook

    The management of Flour Mills of Nigeria has assured that the company would consolidate its performance in the last quarter with a view to ensuring better returns to shareholders.

    In a statement, the management of Flour Mills said it expects contributions to the group’s bottom line from a variety of investments that will come on stream.

    “The company’s outlook for the last quarter of the financial year remains positive. Management will focus attention on its innovative routes to the market and distribution network to sustain the growth momentum and deliver good value to stakeholders,” Flour Mills assured.

    According to the company, in spite of the challenging economic and tough business environment, it had posted an impressive result for the nine-month period ended December 31, 2013 as turnover rose by 28 per cent from N139.2 billion to N178.9 billion.

    However, group’s earnings before tax for the nine months declined from N8.2 billion to N5.9 billion.

    The company attributed the decline in bottom-line to operational ramping up and strong competition faced by its subsidiary- Golden Sugar Company Limited, which launched its products during the first quarter of the financial year.

    It noted that increased production capacity and enhanced efficiency following completion of the ‘West Mills’-the company’s latest milling facility, contributed to the improved performance.

    The statement stated that the company derived some benefits of synergy arising from internal restructuring and completion of merger with two former subsidiary companies, Niger Mills Company Limited and Nigerian Bag Manufacturing Company Plc.

     

  • Flour Mills to set up food, UI centre

    Flour Mills of Nigeria Plc is to establish a food research centre—Flour Mills Food Research Centre—at the University of Ibadan(UI).

    The centre, the first of its kind in any university, is a partnership between Flour Mills of Nigeria Plc and UI, the nation’s premier university.

    In the partnership during the first phase, Flour Mills will provide an initial payment of N30 million, for the procurement of equipment and running of the centre during the first three years; the university will provide a building housing two laboratories for pilot plant studies and research in food product development.

    At the flag-off of the project in UI, Flour Mills Group Managing Director, Chief Emmanuel Ukpabi, said the firm recently reviewed, redefined and articulated its Corporate Social Responsibility policy.

    Following the review, the firm now has a strong focus on environmental sustainability, education, research and skills development, health and welfare, infrastructural development and security. This, he said, was in furtherance of Flour Mills’strong belief that business should be run in a profitable, but sustainable and socially responsible manner, creating great value for all stakeholders and giving back to the society.

    The objectives of the Flour Mills Food Research Centre, according to Ukpabi, include contributing meaningfully to attaining national food security through research and development; strengthening the weak industry-academia linkages in Nigeria and promoting greater collaboration between the food industry and institutions that offer training in food science and technology in the country.

    The centre to be equipped with state-of-the-art facilities will be available to researchers and students from all over Nigeria and other parts of the world.

    Flour Mills’ Agro Allied Business Managing Director,Mr Paul Gbededo, said the firm aligned itself with the Federal Government’s Agricultural Transformation Agenda, adding that the setting up of the centre was most appropriate.

    He added that Flour Mills was pursuing an aggressive investment in agro-allied initiatives, growing palm for its edible oils and fats business, rice for its rice mills, cassava for its high quality cassava flour processing, starch and glucose business; and sugar cane for its mill and sugar refinery.

    Gbededo expressed hope that the centre would be the hub of research activities in the university on value-added food processing and reduction in post-harvest food losses to promote food sufficiency in Nigeria and reduce food importation.

  • Flour Mills’ plan to reabsorb Bagco shocks investors

    Investors have expressed shock over the sudden decision of Flour Mills of Nigeria Plc to reabsorb its subsidiary- Nigerian Bag Manufacturing Company (Bagco) Plc, which was spun off and listed as a separate entity on the Nigerian Stock Exchange (NSE) in 2008.
    Shareholders who spoke to The Nation, said they were yet to fully grasp the rationale behind the decision, pointing out that Bagco appeared to be stable and in good stead for continued growth.
    Flour Mills had last weekend indicated it would reabsorb Bagco and its subsidiary- Northern Bag Manufacturing Company Limited (Bagco-North). Flour Mills holds 70 per cent equity stake in Bagco. Bagco, a manufacturer of woven and laminated polypropylene bags, was incorporated in 1964 and had operated as a division and subsidiary of Flour Mills of Nigeria until it was spun off in 2007. It was listed on the NSE in April 2008 after a successful Initial Public Offering (IPO). Bagco Group includes two subsidiaries-Bagco Morpack Nigeria Limited and Northern Bag Manufacturing Company Limited.
    A leader in one of the shareholders’ association and activist, Alhaji Gbadebo Olatokunbo, said shareholders were surprised by the decision as there were no indications to that effect.
    According to him, it was more surprising because Bagco is doing well and shareholders are happy with the company’s performance.
    He, however, said Flour Mills has already contacted minority shareholders and promised to discuss the rationales behind the decision with them.
    Market operators who spoke under condition of anonymity, said the decision further brought to the fore the issue of attractiveness of listing on the NSE.
    They noted that availability of fiscal and regulatory incentives purposely for quoted companies would have discouraged companies from thinking about delisting, even at slightest change.
    According to the plan by Flour Mills, the re-absorption would entail the transfer of all assets, liabilities and undertakings of Bagco and Bagco-North to Flour Mills of Nigeria. Consequently, the entire issued share capital of Bagco and Bagco-North would be cancelled and the minority shareholders of Bagco will have an option to elect for cash or shares in Flour Mills at a price to be determined using mutually agreed valuation methods. Bagco and Bagco-North will therefore be dissolved without winding up.
    Flour Mills stated that the combination would streamline operations, reduce administrative costs, improve operating efficiency and capture the full synergies arising from the merger, which, in turn will result in a significant enhancement of shareholder value.
    Bagco had sold its IPO at N3.90 per share. It opened yesterday at N1.80 per share.
    With 35 per cent increase in net earnings per share from 16.5 kobo in 2011 to 22.3 kobo in 2012, Bagco increased cash dividends from N808 million in 2011 to N870 million 2012. This implies a dividend per share of 14 kobo for 2012 as against 13 kobo paid for 2011. The future dividend outlook of the company remained robust with a dividend cover of 1.59 times in 2012 as against 1.29 times in 2011. Net assets per share also increased from N1.48 to N1.57. The yields of the subsidiary are better than that of Flour Mills, which had struggled with declining margins in recent years.