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HFMP and FMN combination: the formation of a national champion

The contribution of key players in the Nigerian food industry has grown in value and relevance over the years. According to a report Nigeria is ranked as Africa’s largest food market by the World Trade Organization (WTO), with significant investment in local industry and a high level of imports. At present, the food and beverage sector is estimated to contribute 22.5% of the value of manufacturing industry and 4.6% of Nigeria’s GDP. In other report compiled by PricewaterhouseCoopers (PwC), it has been confirmed that the food sector contributes on average 57% of gross domestic product (GDP) and generates 64.5% of export earnings.

Founded in 1972, Honeywell Group began as a food trading company serving the West African region before turning to importing a variety of products for the Nigerian domestic market. Now operating an investment holding company based in Nigeria, Honeywell Group Limited has diversified its activities into different sectors known as holding companies. The Group has evolved into an investment firm participating in key sectors of the Nigerian economy, including food, real estate, leisure and hospitality, energy, infrastructure and financial services.

Honeywell Flour Mills Plc (HFMP), one of the portfolio companies of Honeywell Group Limited and the market leader in the milling, processing and packaging of flour and other wheat products in Nigeria, has continued to contribute immensely to the growth and performance of the Nigerian industry. economy. With over 20 years of experience, HFMP has accumulated extensive knowledge and skills in the production of flour and a range of flour products. The company has superior operational efficiency and remains a dominant player in the food industry in Nigeria.

Operating on a total installed capacity of 2,610 metric tons per day, HFMP manufactures a variety of products ranging from wheat flours, semolina, noodles, superfine flours to spaghetti, macaroni, brown flour, among others.

At the recent annual general meeting (AGM) of the company held on October 14, 2021, the company achieved a record turnover of 109.5 billion naira, an increase of 36% from 80.4 billion naira for the fiscal year ended March. 2021. The company’s operating profit also grew faster than revenue at 39%, from 5.4 billion naira in fiscal year 2019 to 7.6 billion naira in fiscal year 2019. fiscal year 2020.

Most recently, Honeywell Group Limited announced the signing of an agreement with Flour Mills of Nigeria Plc (FMN) on the proposed combination between Honeywell Flour Mills Plc and Flour Mills of Nigeria, another leading Nigerian food manufacturer to strengthen increased food security in the country. and create a more resilient national champion in the Nigerian food industry. This agreement will allow Honeywell Group Limited to sell a 71.69% stake it holds in HFMP to FMN.

Building on the achievements and improved performance of HFMP and FMN year by year, it can be seen that this is a combination of two giants of the agribusiness industry in Nigeria. With over 85 years of combined experience from the two companies and their common goal of making affordable food available to the people of Nigeria, stakeholders will benefit from this combination in many ways.

Based on the scale of the operation that will be carried out by the consolidated company, this will provide employees with more career development opportunities in a larger organization, with the potential to create more jobs in the economy. . Customers will also benefit from access to a wider product range and an even stronger flow of innovation that can only be provided by a combined entity with stronger teams and financial strength. In addition, Nigeria and its food security program will benefit from the focus by both companies on the development of Nigeria’s industrial capacity, its agricultural value chain and in particular the upstream integration of the food industry.

The proposed combination will bring together two trusted and entrenched brands, creating a single entity to become a national champion in the food manufacturing space that is best positioned to benefit the growing Nigerian population and take advantage of the opportunities arising from the free zone. -exchange of the African continent (AfCFTA).

As this deal comes to an end, Honeywell Group, a leading investment firm, is focused on improving and growing its investment portfolio. This will see it consolidate in the sectors where it currently operates, such as real estate, energy, financial services, infrastructure. The company also intends to announce more strategic initiatives in the coming months.