As part of internal restructuring towards achieving efficiency, Flour Mills of Nigeria (FMN) plc has merged Golden Sugar Company with Sunti Golden Sugar Estates Limited.
The reason behind the merger is to properly align the business for enhanced performance and create more opportunities for growth and profitability, said John G. Coumantaros, chairman of FMN.
Speaking at the annual general meeting held by FMN in Lagos last Wednesday, Coumantaros said the restructured sweetener value chain has begun to yield positive result for the group as it has begun to declare an accretive value.
“For the first time after the restructuring, we were able to declare a positive bottom line to create value for the investment of our shareholders and other stakeholders,” he said.
Nigeria President Muhammadu Buhari commissioned FMN’s N50 billion Sunti Golden Sugar Estates in March 2018, featuring 17, 000 hectares of irrigable farmland and a sugar mill processing 4,500 metric tons (MT) of sugarcane per day.
At full capacity, the estate can produce 1 million tons of Sugarcane which roughly translates into 100,000 MT of sugar yearly.
According to Coumantaros, the Sunti Golden Sugar Estates achieved its first development target of reaching 2,836 hectares of land under cane in July 2018. He said the company completed the construction of three drain pump stations with the heightening and strengthening of dyke along 10 kilometres on the North-Eastern side of the recurrent challenges of flood.
He recalled that in September 2018,the company’s dykes were breached, causing serious damage with most of the cultivated land submerged.
“I am happy to report that we have been able to recover the areas lost due to the flood, and a project to further strengthen our dyke by placing 300,000m3 additional material along 13km has been completed,” he disclosed.
FMN ‘s group revenue fell 3 percent to N527.40 billion in March 31, 2019, from N542.67 billion in March 31, 2018. Profit from continuing slumped to N4 billion, from N13.6 billion in the corresponding period. But the company paid some of its debt as net debt fell by N21.2 billion while finance cost crashed 30 percent to N22.9 billion, from N32.7 billion.
The financial position shows that Nigerian manufacturers operate in a tough environment as poverty rate of almost 50 percent and unemployment of 23 percent continue to shrink consumer wallets.
FMN’s subsidiary Rom Oil Mills, which is currently exporting to West Africa, raised its production within the financial year by 13 percent to 134,082.58 MT.
“This improvement was recorded despite shortages in key raw materials and intense competition pressure arising from inward smuggling of crude palm oil, which is sold at outrageously cheap prices,” he said.
He disclosed that Rom Oil, supported by its subsidiary Agri Palm’s 3,500 hectares of oil palm plantation, has achieved a solid step-up performance.
For Premium Feed Mills, one of FMN’s subsidiaries, Coumantaros said the company commissioned a new extrusion line with a capacity of 5,000 MT of aquafeed per month, adding that the line is designed to meet the needs of the Nigerian market.
ODINAKA ANUDU
