BrandArena: BUA divests from flour milling business in $275m deal

Monday 11 January 2016

BUA divests from flour milling business in $275m deal

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 USD275million.

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. Our 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.”
Abdulsamad Rabiu, Chairman BUA 
Further speaking on the Group’s medium term growth strategy, Alhaji Rabiuwho is also the Executive Chairman of BUA, said that expanding the backward integration of its sugar plantationsin Kwara and Kogi Sates is key.“Extensive work is ongoing in Lafiagi, Kwara state with over 20,000 hectares 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 integrationof 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 MTPAcapacity expansions respectively to bring the Group’s cement production capacity to around 10million MTPA by 2018,” he added.

In his comments, 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.

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