Michael Eboh
25 October 2009
Flour Mills of Nigeria Plc has concluded arrangements to further diversify its operations into other key sectors of the economy, announcing its plans to set up a sugar refinery in the near future.
The company got the approval of its shareholders to acquire 51 per cent stake in a rival flour mills -- Nigerian Eagle Flour Mills Limited, (NEFM) Ibadan.
Speaking during its annual general meeting in Lagos, last week, the Chairman of the company, Mr. George Coumantaros disclosed that its plans to establish a refinery was in furtherance of its plans to diversify into the production of sugar, following its acquisition of a sugar plantation in the country.
According to him, "Following extensive market research and feasibility studies, the Board of Directors has decided to strategically invest in sugar business. We have already acquired a large sugar plantation, Sunti Farms in Niger State and plans are in top gear to establish a sugar refinery. For the realisation "
He disclosed that the sugar refinery and production will help it take advantage of the enormous opportunities in the sector and also compete with importers of the product.
Shareholders of the company, at the annual general meeting, gave the company the go-ahead to acquire majority stake in NEFM
According to the Coumantaros, the acquisition is part of its growth strategy and will further improve its market share, as it will enhance its ability to achieve greater penetration into markets in the South West region of the country.
"As parts of the robust strategy to strengthen our core business, we have decided to acquire 51 equity of NEFM, Ibadan. NEFM produces top quality flour with a unique brand appeal that is highly ranked by bakers in the Western Market segment.
"In addition to reaping benefits of synergy, the proposed acquisition will not only provide us with a greater leverage, it will also enhance our ability to achieve greater penetration into strategic markets in the South West where demand for our remains very strong but unfulfilled," he noted.
The company's turnover stood at N180.07 billion, rising by 41 per cent from N127.66 billion in its 2008 financial year, it posted a profit before tax and exceptional item of N11.92 billion, from N9.88 billion recorded in 2008 and an exceptional item of N6.45 billion.
Its profit before tax, however, dipped by 45 per cent, from N9.88 billion in 2008 to N5.47 billion in the year under review, while its profit after tax also dropped by 39 per cent, from N6.36 billion in 2008 to N3.89 billion in the year under review.
Shareholders of the company also approved its dividend proposal of N854.19 million, representing a 45 per cent drop from a dividend of N1.55 billion declared in 2008. To this end, it will be paying its shareholders, a dividend per share of 50 kobo, representing a 45 per cent drop from a dividend of N1.55 billion declared in 2008. To this end, it will be paying its shareholders, a dividend per share of 50 kobo, representing a drop of 50 per cent from a dividend of N1 per share declared in 2008.
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