Flour Mills undaunted by economy as expansion continues
Flour Mills of Nigeria (FMN) has remained undaunted by Nigeria’s economic swings as the company continues to expand from flour to sugar.
FMN is one of Nigeria’s largest conglomerates with interests in flour, sugar, palm oil, noodles, animal feeds, grains and logistics, among others.
Despite swings in the Nigerian economy, the group has continued to invest billions in backward integration projects across states, pumping money in areas where there are demand-supply gaps.
The group has invested in a fertilizer blending plant in Kudenda, Kaduna State, as well as silo complexes from the Federal Ministry of Agriculture and Rural Development (FMARD).
FMN plc has invested N50 billion in the sugar value chain, providing a concrete example of efforts to cut sugar importation into Africa’s most populous country.
The group’s Sunti Golden Sugar Estate , near Mokwa, in Niger State, is situated on 17,000 hectares of irrigable farmland, and a sugar mill that processes 4,500 metric tons of sugar cane per day.
It invested over N1bn in irrigation system and infrastructure, including drain pumps, pump stations and a power grid, a recent statement from the group said.
Analysts believe the group, alongside Dangote, has made genuine efforts to curb sugar imports from Brazil into Nigeria.
Speaking at an annual general meeting held in June this year in Lagos, John G. Coumantaros, chairman, FMN, said the sugar investment had made huge savings in foreign exchange for the country, boosted local capacity and reduced unemployment by putting thousands of Nigerians to work in the agriculture sector in line with the agricultural policy of the government.
“At full capacity, the mill is expected to produce one million tons of sugarcane, which roughly translates into 100,000 metric tons of sugar yearly.”
As a company, FMN’s revenue rose four percent to N389 billion, with profit before tax (PBT) recording a 28.9 percent surge, rising from NN10.979 billion in the year ended March 31 2017 to N14.153 billion in the corresponding period of 2018. The company experienced a drop in profit after tax (PAT), from N9.829 billion in 2017 to N9.244 billion in 2018. The Group’s PBT rose from N10.472 billion in 2017 to N16.541 billion in 2018. Similarly, the Group’s PAT surged from N8.836 billion in 2017 to N13.615 billion, representing a 54.08 percent rise.
It was gathered that one of the subsidiaries—Agri Palm Limited—located at Iguiye and Ugbogui near Benin City (with 4.500 hectares of oil palm plantation) recorded improvements in yields with a 25 percent increase in fresh fruit bunches.
Coumantaros said following the acquisition of additional 20,000 hectares of arable land in Edo State, FMN was on the verge of ascertaining the boundaries by planting beacons for better management.
As part of FMN’s plan to raise starch production, one of FMN’s subsidiary—Agro-allied Syrups Limited—has succeeded in cultivating 800 hectares of cassava in Shao, Kwara State, in the last 12 months, Real Sector Watch understands.
“You would recall that in my last year’s report, I highlighted our Group’s agreement with Ere-Egwa Farms Limited, a company with wide experience in the growing of cassava to support our downstream company with the supply of cassava through a contract farming arrangement. I am pleased to report that the strategic decision had started yielding the desired results, as evident in the increased supply of cassava tubers to Thai Farm International, our downstream company in the value chain,” he said.