Flour Mills of Nigeria Plc has disclosed its preparedness to lists one of its subsidiaries, United Cement Company of Nigeria Limited (UNICEM) on the floor of the floor of the Nigeria Stock Exchange (NSE).
The Group Managing Director, Mr. Emmanuel Ukpabi, who stated this recently at the company’s Fact Behind the Figures on the floor of the Exchange said the cement division has attained a level of independence and that plans were also underway to quote it on the Exchange.
Ukpabi said Unicem has continued to take giant strides to improve its operating performance in the face exceptional challenges and difficulties, adding that due to some technical and operational constraints Unicem managed to utilise only 60 per cent of its installed capacity of 2.5 million metric tonnes per annum at the Green Field Cement Plant in Cross River State.
He noted that the installation and commissioning of a new crusher suitable to local climatic conditions, by the third quarter of 2011, would boost capacity untilisation to over two million metric tonnes and provide the company the leeway to financially break-even in the current year.
Ukpabi said Unicem has continued to pursue appropriate strategies to drive growth and bring the company to profitability with assistance of its partners, Lafarge and Holcim, the two foremost global players in cement production.
“During the year, Flour Mills increased its equity stake in Unicem from 22 per cent to 28 per cent, an emphatic demonstration of our confidence in the company’s future potential. We remain confident that given stable and effective management, a speedy completion of the gas pipeline plus significant increase in capacity utilisation, Unicem will be able to achieve a financial break-even point by the end of current financial year and position itself towards making significant contribution to future group profitability,” he said.
As part of its expansion programme, Ukpabi said it has concluded arrangement to float N25billion right issue to enhance its operations.
He noted that plans were also underway to further develop its retail market in line with ongoing efforts by the management of the company to make its product available to more consumers.
Ukpabi noted that Flour Mills overall strategy was to grow and diversify into sustainable food businesses that have synergies to existing operations.
He explained that part of the strategies was to expand the consumer arm of its food business both organically and through targeted acquisition and/or joint ventures, adding that “currently expanding existing capacity and discussion with potential targets in the food and beverages sector.”
Ukpabi said the company was to also engage aggressively with the agro-allied sector and this would present not only unique challenges but also unique opportunities and reward.
“Additional farmland for cultivating sugarcane, palm tree, maize, soybeans and possibly rice will be acquired in various locations across Nigeria,” said Ukpabi.
He described Flour Mills Plc as one of the largest food producers in Nigeria with 45 per cent market share.
The company’s operation according to him had been upgraded and modernised to a completely automated system run by programmed logic controlled technology which has resulted in higher extraction rate, enhanced efficiency and improved quality product consistency.
“Since inception, Flour Mills has remained at the forefront of wheat milling in Nigeria. The company’s flagship brand ‘Golden Penny’ is one of the best known and the preferred brand amongst bakers, confectioners and end consumers in Nigeria and abroad. Golden Penny Semovita has become the generic team for Semovita.
“As part of its diversification strategies, the company is engaged in the importation and distribution of bulk cement (under the Burham Cement brand), local cement manufacturing via United Cement Company of Nigeria Limited (UNICEM), a joint venture with Holcim and Lafarge,” he added.
In what has been attributed to increase in its operational cost, Flourmill Nigeria Plc has recorded a N7.49 billion drop in its return on investment to shareholders in financial record for the year ended 2011.
The fall in the company’s value addition to shares in the going concern represent a dip of 44.21 per cent when compared to a profit of N16.94 billion made in the corresponding year of 2010.
In the company’s audited report presented, the figures showed that, while turnover for the period rose by N30.188 billion or 14.61 per cent to N236.796 billion, from the previous N206.608 billion; the cost of sales jumped by N30.07 billion or 23.71 per cent to N198.611 billion, compared with the previous year’s N160.541 billion.
Also in the period under review profit before tax fell from N24.439 billion to N16.445 billion, representing a decline of N7.994 billion or 32.71 per cent, while profit attributable to shareholders dropped by N7.49 billion or 44.21 per cent to N9.45 billion, as against the profit of N16.94 billion, in the preceding 12 months.