Nigerian Billionaire Abdulsamad Rabiu Sells Flour Milling Business For $275 Million
BUA Group, one of Africa’s largest food and infrastructure conglomerates, has sold its flour business to Olam International of Singapore for $275 million.
Speaking at the signing ceremony over the weekend in Lagos, Nigerian billionaire Abdulsamad Rabiu, founder and Executive Chairman of BUA Group, said that 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.
“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.
Providing insights into the Group’s medium term growth strategy, the billionaire businessman said that BUA Group is expanding the backward integration of its sugar plantations in Kwara and Kogi states in Nigeria in an effort to reduce Nigeria’s dependence on imported raw sugar while supporting the value chain in sugar production within the country. BUA Group is currently working on a 20,000-hectare sugar plantation in Lafiagi, Kwara state in Nigeria’s southwest region, and developing another 50,000 hectares of farmland in Bassa, Kogi.
“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 3.5million MTPA and 1.5million MTPA capacity expansions respectively to bring the Group’s cement production capacity to around 10million MTPA by 2018,” Rabiu added.
Rabiu also said that with global prices of crude oil plummeting and demand for foreign exchange going up, 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.
The assets Olam is acquiring from BUA include 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.
K.C. Suresh, Olam’s Managing Director/CEO for Grains, said that 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.
Olam International, which has its headquarters in Singapore, is one of the world’s largest agribusinesses, operating across the value chain in 65 countries, supplying various products across 16 platforms to over 13,800 customers worldwide. From a direct sourcing and processing presence in most major producing countries, Olam has built a global leadership position in many of its businesses.
BUA Group was founded in 1988 by Nigerian billionaire Abdulsamad Rabiu. The conglomerate has operations in sugar refining, cement production, real estate, logistics and port operations.
Rabiu currently has a net worth of $1 billion according to FORBES‘ November ranking of Africa’s 50 Richest People.
Mfonobong Nsehe , CONTRIBUTOR