Olam acquires wheat milling, pasta-making assets in Nigeria for S$396m

SINGAPORE — Mainboard-listed Olam International has acquired Amber Foods in Nigeria for US$275 million (S$396 million), doubling its wheat milling capacity in the African country, the commodities group said in a news release today (Jan 11).

Amber Foods owns the wheat milling and pasta manufacturing assets of the BUA Group in Nigeria, through its subsidiary Quintessential Foods Nigeria.

The assets to be acquired include two wheat mills and a pasta manufacturing facility in Lagos, a non-operating mill in Kano in the north of Nigeria, and a wheat mill and a pasta manufacturing plant under construction in Port Harcourt in the southeast of Nigeria, Olam said.

It added that the takeover will increase its total wheat milling capacity in Nigeria from 2,380 metric tonnes per day (TPD) to 6,140 TPD once the facilities in Port Harcourt are completed in June.

The acquisition will be funded through a combination of debt and internal accruals, the commodities group said.

“Nigeria is a high growth milling market with volumes expected to reach five million metric tonnes in 2020 as population growth and urbanisation increase the demand for wheat-based products. The size of the Nigerian flour market is in excess of US$2 billion, growing at 3.5 per cent per year while the pasta market is growing at the rate of 8 per cent per year,” said Mr K C Suresh, the managing director and CEO of Olam Grains. CHANNEL NEWSASIA