Nigeria’s indisputable market leader in food and agro-allied products, Flour Mills of Nigeria Plc, has notified all the stakeholders of its plans to restructure its fertilizer business. In this regard, it has filed a scheme of arrangement with the regulatory authorities for authorisation.
“Flour Mills of Nigeria Plc, the market leader in food and agro-allied products in Nigeria, has announced it has filed a scheme of arrangement with the Securities and Exchange Commission (SEC) to transfer its existing assets in one of its divisions, Golden Penny Fertilizers, to its wholly owned agro-allied company, Golden Fertilizer Company Limited.
“The move, which is part of a well-thought-out, and on-going restructuring process within the FMN Group, is expected to improve synergy, increase efficiency , and ultimately position FMN for greater operational and financial flexibility to ensure continued business growth”, a notice signed by Umolu Joseph, company secretary and director of legal services at FMN stated.
“Upon approval by SEC, and on completion of the restructuring process, Golden Fertilizer Company Limited will serve as a Holding Company for all FMN Group’s agro-allied businesses. The proposed restructuring will be effected through a scheme of arrangement under Part XII of the Investment and Securities Act no. 29 of 2007(ISA) , and Section 539 of the Companies and Allied Matters LFN 2004”, according to the notice sent to all the stakeholders.
Flour Mills of Nigeria Plc presently controls about 70 percent of the nation’s food and agro-allied products through presence in foods, agro-allied, and, logistics and supports businesses. In recent times, the company has invested over N150 billion in backward integration activities through which it aims to minimise the impact of the volatility in exchange rates.
“Volatile commodity prices arising from unpredictable changes in global supply and demand, exchange rate fluctuations and punitive tariffs and import barriers, has made our reliance on imported raw materials risky, expensive and unsustainable. The need to create value further back in the supply chain and reduce dependence on imported raw material has been identified as a strategic imperative for our Group in the years ahead. The investment of the next N150 billion will, therefore, focus on a strategy of backward integration to maintain growth and sustained profitability”, Flour Mills of Nigeria, stated.
Flour Mills of Nigeria Plc made N269.7 billion as revenue and N5.05 billion as the total comprehensive income at the end of the second quarter ended September 30, 2018.
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