By Princewill Ekwujuru
Olam Nigeria said its Singapore-based holding company, Olam International Limited has acquired Amber Foods Limited for $275 million. If the amount is converted with the current official exchange rate this amounts to N8.4150billion.
The deal was consummated through Olam’s subsidiary Quintessential Foods Nigeria Limited who are owners of the wheat and pasta manufacturing assets of BUA Group in Nigeria.
The BUA Group, is a diversified foods and infrastructure business group in Nigeria, it’s among the top five wheat millers in the country with wheat milling and pasta manufacturing capacities of 3,760 and 700 metric tonnes per day (TPD) respectively.
The assets to be acquired include two wheat mills and a pasta manufacturing facility in Lagos, a mill in Kano, and a wheat mill and a pasta manufacturing plant under construction in Port Harcourt.
The wheat milling sector in Sub-Saharan Africa has been an area of investment focus for Olam since 2010 when it acquired Crown Flour Mills, CFM in Nigeria. Since then, Olam has expanded Crown Flour Mills capacity and set up milling operations in Ghana, Senegal and Cameroon.
Accordingly, this acquisition will strengthen Crown Flour Mill’s position as the number two wheat miller by sales volume and make it a leading pasta player in Nigeria. Crow Flour Mill’s total wheat milling capacity in the country will increase from its current 2,380 TPD to 6,140 TPD once the facilities in Port Harcourt are completed in June 2016.
The Country Head of Olam Nigeria, Mukul Mathur, said: “We are confident about the growth prospects in Nigeria, so expanding our participation hereis a logical step to capitalise on the opportunity. Our value-added export business in the country puts us in a strong position to generate the much required forex and actively support the Produce-Add-Value-Export, PAVE initiative of the Federal Government of Nigeria.
Managing Director of Crown Flour Mills, Anurag Shukla, added: “This acquisition further increases Crown Flour Mill’s ability to provide low cost food staples to the Nigerian population that have been manufactured in-country. Wheat-based products, such as pasta, have grown in popularity among Nigerians due to changing tastes, the gradual rise of convenience and, for many, as an affordable option to meet carbohydrate requirements.”
“We are pleased to acquire the BUA Flour and BUA Pasta brand. Both brands are very well known and respected in the industry and we look forward to further developing them and increasing their reach across Nigeria, leveraging our extensive sales and distribution network. We will also invest in building the skills and capabilities of our employees and in providing a safe working environment.”