December 5, 2011


Olam to broaden wheat milling facility in Nigeria


A proposed expansion of its wheat milling capacity at Crown Flour Mills ("CFM") in Nigeria for a total outlay of about US$50 million has been announced by Olam International Limited on Friday (Dec 2).


Nigeria currently imports approximately four million tonnes of wheat per annum which finds application in bread, noodles, biscuits and pasta. The growing demand for these convenience products which are largely consumed in urban centres is driven by GDP growth of about 6.8% and the growth in urban population at a rate of about 3.8% per annum.CFM which ranks amongst the three largest wheat millers in Nigeria, was acquired by Olam in January 2010. The acquired operation included two port-based milling facilities in Lagos and Warri with total installed capacity of 1,630 tonnes per day.


The current investment will lead to (a) the addition of a semolina mill and a flour mill in Lagos, each of 250 tonnes per day and (b) a 250 tonnes per day flour mill in Warri taking the total installed capacity from 1,630-2,380 tonnes per day and (c) Increased Silo storage space to accommodate an additional 18,000 tonnes of wheat storage across Lagos and Warri. Construction and commissioning is expected to take 17 months.


Olam's President for the Grains business K C Suresh said "This investment is a step forward towards our target of increasing our share of the Nigerian flour market. The addition of two swing mills will enable us to produce both standard flour / semolina or a special blend of flour and semolina for manufacturing Pasta. This offers us flexibility in addressing all potential flour needs, i.e., bread, noodle, pasta and semolina."

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