Dufil Prima Foods, also known as De United Foods Industries Limited, maker of Indomie noodles, is going from strength to strength.
The company is currently the market leader in the noodles sub-sector, which is a testament to opportunities in Nigeria’s food industry.
Key success drivers are Nigeria’s demography, the rural-urban migration and changing consumer tastes, said Ike Ibeabuchi, a manufacturing sector analyst.
“You can do anything with 200 million people, half of who are under 30—obvious noodles consumers,” he said.
Dufil has a large customer base that has come to love the taste of its noodles.
The company has a long history in Nigeria. It entered the noodles industry in 1996, with a manufacturing plant in Ota, Ogun State. When it first produced Indomie, Nigerians gave a veiled protest, saying that the company was trying to make them eat worms. But this perception soon evaporated.
Five years after, the company incorporated its Choba, Port Harcourt, plant. As of 2004, it was already producing one million cartons of Indomie per month.
The company continued expansion, incorporating Insignia Print Technology LFTZ Enterprise in 2007 as a subsidiary of Dufil Prima Foods Limited at Lekki, Lagos. In 2008, Dufil Prima Foods was converted into public limited company and became the holding company of the group. This was also the year the noodles maker started the seasoning division at Ota.
With demand for its noodles rising, Dufil reached the production of one billion packs of Indomie noodles in 2010.
That is not all, as the firm incorporated and commenced operation of Northern Noodles Limited as a subsidiary of Dufil Prima Foods Plc at Kaduna.
The company is today the leader in the industry, acquiring two production lines of Dangote Noodles Limited for N3.75 billion ($12.26 million) in November 2017.
Dufil signed an agreement with Dangote Noodles to buy its plants at Ikorodu and Calabar factories. The firm was also to buy stock worth N383.94 million.
In May 2018, the company acquired May &Baker’s Mimee noodles, with its production line, in a deal worth N775 million.
“We are pleased to announce this transaction, which delivers immediate value to our current shareholders and reflects the successful alignment, partnership, and commitment of our board, employees and suppliers,” Girish Sharma, chief operating officer of Dufil Prima Foods, said while confirming the deal.
Sharma had at an earlier meeting said that the company was on an expansion drive that would see it investing additional N20 billion in Nigeria after its initial N10 billion investment.
Dufil acquired 100 percent of May&Baker’s food division, and less than 10 percent of its total balance sheet size, Sandra Aduba, May and Baker’s head of communication department, said.
“The noodles industry is a red ocean and a loss contributing unit for us hence the decision to sell. The board and shareholders approved the sale at an EGM held on 23rd Nov. 2017,” Aduba said in an emailed response to BusinessDay questions.
Many Nigerians may not know that this company exports noodles to several markets, including the United States and Europe. Africans, especially Nigerians, in the Diaspora consume this product in large quantity. Little wonder why the company’s export to the United States alone reached about $30 million in 2013, said Deepak Singhal, chief executive officer of the company, at an event that year. Also around that year, it was gathered that Dufil was already a $600 million company.
Unconfirmed sources said the company, in 2012 alone, sold 1.6 billion packets of noodles between N35 and N95, which was then more than what wasconsumed in any country outside Asia, except the US, Brazil and Russia.
In 2017, Dufil, following the approval granted by the FMDQ Board Listings, Markets and Technology Committee, listed the Dufil Prima Foods N10bn Series 1 Fixed Rate Bond under its N40bn Bond Issuance Programme on the OTC Exchange.
The Series 1 issuance achieved a 100 percent subscription level with participation from a wide array of domestic (pension fund administrators, fund managers and commercial banks) and foreign investors.
The proceeds of the issuance were to be used to refinance existing debt obligations and finance partial capital expenditure plans of the company.
“Dufil, as a company operating in the Nigerian market for over two decades, is pleased to have taken this additional step in expanding and diversifying its financing options beyond the conventional commercial bank debt market by establishing relationships with non-bank institutional investors in Nigeria. Dufil bond received participation from both domestic and foreign Investors. In case of domestic investment, a wide range of top- notch pension funds, asset managers and banks participated. Furthermore, Dufil is also extremely pleased to have had foreign investor participation in the bond issue as this is a testament to the company’s adherence to international best practices and standards, which the company employs in all aspects of its business operations,” Madhukar Khetan, then chief operating officer for Dufil, had said.
Apart from the noodles maker, there are other major players in Nigeria’s food industry, including Dangote, Flour Mills of Nigeria, Chagoury, Honeywell, Nestlé, PZ Wilmar, and OK Foods, among many others.
“Fast food is expected to grow, driven by urbanisation and the increasingly rapid lifestyles of Nigerians, which encourages them to choose a quick fix for their meal requirements. This is especially so, given that the average age of Nigerian consumers is below 30 years,” Euromonitor International said in its April 2018 report.
ODINAKA ANUDU
