Flour Mills eyes dual listing after restructuring plan

Flour Mills of Nigeria Plc (FMN), a major player in Nigeria’s food and agro-allied industry, is undergoing a significant business restructuring aimed at driving long-term growth and expanding its footprint across Africa. As part of this reorganisation, FMN plans a dual listing—re-listing on the Nigerian Exchange (NGX) while exploring an additional listing on another stock market. This move aligns with FMN’s broader strategy to solidify its presence as a pan-African food business.

According to John Coumantaros, FMN’s chairman, the company is committed to scaling its operations in Nigeria and beyond, with a particular focus on its sugar and food businesses. FMN has secured regulatory approval to buy out its minority shareholders through a scheme of arrangement, which will lead to its temporary delisting from the NGX. However, after completing its restructuring process, FMN plans to return to the market with a stronger, retooled business model.

FMN’s ambitious plans include streamlining its 22 business units into five core companies, a move aimed at attracting technical and financial partners to support growth in high-potential sectors. In the next four years, FMN intends to invest $1 billion to expand its operations, with $500 million earmarked for scaling up its sugar production in Niger State and $100 million for building a cassava-processing plant to reduce Nigeria’s reliance on cassava starch imports.

Additionally, FMN will leverage the African Continental Free Trade Area (AfCFTA) to expand its operations across Africa, starting with West Africa. By tapping into AfCFTA’s opportunities, FMN aims to position itself as a leading pan-African food business, creating jobs and driving food security across the continent.
Source: BusinessDay

Expert Review for Agri-Food Stakeholders:

Flour Mills of Nigeria’s (FMN) strategic business restructuring and dual listing marks a significant step towards solidifying its position as a pan-African agri-food giant. The company’s focus on core sectors such as sugar, cassava processing, and cereal production will not only boost Nigeria’s agricultural output but also position FMN as a key player in driving food security across the African continent.

Key Implications for Agri-Food Stakeholders:

Boosting Domestic Production and Reducing Imports: FMN’s investment in its sugar and cassava operations comes at a critical time for Nigeria’s agri-food sector. The country has long struggled with a dependence on food imports, including cassava starch. FMN’s $100 million cassava processing plant is expected to significantly reduce Nigeria’s starch imports, enhancing self-sufficiency and supporting local farmers through increased demand for cassava. Additionally, the planned expansion of sugar production from 100,000 to 400,000 tons annually will help address the sugar import gap, contributing to Nigeria’s goal of achieving local sugar production targets.

Job Creation and Economic Growth: By streamlining its 22 business units into five key companies and focusing on high-growth areas, FMN is positioning itself to attract technical and financial partners that can help drive innovation and efficiency. This restructuring will not only enhance FMN’s operational capacity but also create numerous employment opportunities within the agri-food sector. The company’s $1 billion investment, particularly in rural areas like Niger State, will stimulate economic growth and contribute to the government’s efforts to alleviate unemployment in the agricultural sector.

Harnessing AfCFTA for Continental Expansion: FMN’s plan to leverage the African Continental Free Trade Area (AfCFTA) is a strategic move to expand its reach beyond Nigeria’s borders. AfCFTA provides opportunities for increased intra-African trade in agri-food products, enabling companies like FMN to tap into new markets. FMN’s focus on scaling up its operations across West Africa positions it as a key driver of regional food security. For agri-food stakeholders, FMN’s expansion across the continent could foster collaborations, boost cross-border trade, and support the growth of local agricultural value chains.

Focus on Sustainable Growth: FMN’s decision to seek technical expertise and financial partnerships highlights its commitment to sustainable growth. By working with partners who bring knowledge in modern agricultural practices, FMN can improve its operational efficiency and introduce climate-smart agricultural techniques, such as drought-resistant crops and water-efficient technologies. This will not only enhance FMN’s competitiveness but also contribute to building a more sustainable agri-food ecosystem across Nigeria and Africa.

Opportunities for Agri-Food Stakeholders:

Farmers and Cooperatives: FMN’s expansion in sugar and cassava processing offers significant opportunities for farmers and agricultural cooperatives, as increased production will drive demand for raw materials. Farmers involved in sugarcane and cassava cultivation could see a rise in their income as FMN scales its operations.

Technical and Financial Partners: FMN’s restructuring plan opens the door for innovative partnerships in areas such as agricultural technology, supply chain management, and food processing. Stakeholders interested in collaborating with FMN could benefit from this growth phase, helping to modernize the agri-food sector in Nigeria and beyond.

Regional Trade Bodies: FMN’s alignment with AfCFTA presents an opportunity for regional trade organizations to foster cross-border trade in agri-food products. By facilitating the flow of goods, services, and expertise, these bodies can contribute to achieving food security across Africa while supporting FMN’s vision for continental growth.

Flour Mills of Nigeria’s restructuring and expansion efforts are poised to have a transformative impact on Nigeria’s agri-food sector and the broader African market. Through its strategic focus on sugar, cassava, and other high-growth sectors, FMN is setting a path for sustainable development, job creation, and regional trade. Agri-food stakeholders, including farmers, cooperatives, technical partners, and regional trade bodies, stand to benefit from FMN’s ambitious plans, contributing to food security and economic resilience across Africa.”