BUA Group, one of Nigeria’s largest foods and infrastructure conglomerates has announced the divestment of its flour business to Olam International in a deal worth $275million.
Speaking at the signing ceremony over the weekend, billionaire industrialist and Founder, BUA Group, Abdulsamad Rabiu said, “This signing marks a major milestone in our medium term strategy. Over the years, we have run one of the largest and most efficient flour milling businesses in Nigeria and are confident in the value it will add to the buyer’s operations’’.
According to him, the ‘’Group’s strategic focus will now be to diversify to business areas with greater potential for export where the sourcing and utilisation of foreign exchange is less and most of the materials needed for production can be sourced locally whilst also positioning our current line of Foods and Infrastructure businesses for market leadership.”
On the Group’s medium term growth strategy, Rabiu who is also the Executive Chairman of BUA, said that expanding the backward integration of its sugar plantations in Kwara and Kogi sates is key.“Extensive work is ongoing in Lafiagi, Kwara State with over 20,000hectares and we have another 50,000 hectares of farmland in Bassa, Kogi. These two operations form the fulcrum of our backward integration programme for Sugar and this will further reduce the country’s dependence on imported raw sugar while supporting the value chain in sugar production within Nigeria.
“Similarly, we expect to replicate the successes we have recorded through the deep integration of our cement operations. With most raw materials for cement currently being sourced locally, we have been able to scale up operations significantly with minimal dependence on foreign exchange and will soon start exporting to neighboring countries from both our Obu and Sokoto plants which are currently undergoing 3.5million MTPA and 1.5million MTPA capacity expansions respectively to bring the Group’s cement production capacity to around 10million MTPA by 2018,” he added.
Rabiu believes that with global prices of crude oil coming down and demand for foreign exchange going up, these projects will help create badly needed jobs in Nigeria, diversify BUA’s business further, and stimulate the Nigerian economy as well as support the government’s roadmaps for agriculture and extractive industries
Olam’s Managing Director/CEO for Grains, K. C. Suresh said that the deal will significantly boost Olam’s flour and wheat milling operations in Nigeria to meet consumer needs as well as consolidate its position as a market leader in the Foods industry in Nigeria. He was confident that BUA’s flour milling business offered great value for money.
Olam International is a leading agri-business operating across the value chain in 65 countries, supplying various products across 16 platforms to over 13,800 customers worldwide. From a direct sourcing and processing presence in most major producing countries, Olam has built a global leadership position in many of its businesses. Headquartered in Singapore and listed on the SGX-ST on February 11, 2005, Olam currently ranks among the top 50 largest listed companies in Singapore in terms of market capitalization.
Established in 1988 by billionaire industrialist, Abdulsamad Rabiu, BUA Group is a leading Food and Infrastructure conglomerate in Nigeria with business interests spanning sugar, rice, cement, real estate, logistics and port operations.
By Pita Ochai