Daily Management Review

Flour Milling Business of Nigerian Billionaire Abdulsamad Rabiu Sold for $275 Million to Singapore Based Olam International


01/11/2016




Flour Milling Business of Nigerian Billionaire Abdulsamad Rabiu Sold for $275 Million to Singapore Based Olam International
The flour business of the BUA Group has been sold to Olam International of Singapore for $275 million. The BUA Group is one of Africa’s largest food and infrastructure conglomerates.
 
Even though BUA Flour Mills had become one of the largest and most efficient flour milling businesses in Nigeria, the sale of the company was crucial to BUA’s medium term strategy of expanding its business operations to other export-oriented activities, said Nigerian billionaire Abdulsamad Rabiu founder and Executive Chairman of BUA Group while speaking at the signing ceremony over the weekend in Lagos.
 
“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 utilization 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,” Rabiu said.
 
In an effort to reduce Nigeria’s dependence on imported raw sugar while supporting the value chain in sugar production within the country, the BUA Group is expanding the backward integration of its sugar plantations in Kwara and Kogi states in Nigeria, said the billionaire businessman while providing insights into the Group’s medium term growth strategy.
 
The BUA Group is currently developing 50,000 hectares of farmland in Bassa, Kogi and working on another 20,000-hectare sugar plantation in Lafiagi, Kwara state in Nigeria’s southwest region.
 
“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 3.5 million MTPA and 1.5 million MTPA capacity expansions respectively to bring the Group’s cement production capacity to around 10million MTPA by 2018,” Rabiu added.
 
BUA’s 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 due helped by the plummeting of the global prices of crude oil and demand for foreign exchange going up, Rabiu also said.
 
Two wheat mills and a pasta manufacturing facility in Lagos, a wheat mill and a pasta manufacturing plant under construction in Port Harcourt in Nigeria’s southeast region and a non-operating mill in Kano in the North of Nigeria are among the assets that Olam is acquiring from BUA.
  
The deal will boost Olam’s flour and wheat-milling operations in Nigeria to meet consumer needs and will help consolidate its position as a market leader in the Foods industry in Nigeria, said K.C. Suresh, Olam’s Managing Director/CEO for Grains.
 
While operating across the value chain in 65 countries, supplying various products across 16 platforms to over 13,800 customers worldwide, the Olam International, which has its headquarters in Singapore, is one of the world’s largest agribusinesses.
 
(Source:www.forbes.com) 






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