On Monday, the media reported that one of Nigeria’s leading biscuit maker, Beloxxi Industries Limited had received an investment of about $80 million from a group of private equity investors led by rock star Bob Geldof .
Geldof’s fund 8 Miles, was said to have acquired a minority stake and is looking to expand its investments in Africa. This is a pretty good source of news for an economy that has been gloomy.
Last year, United Biscuits one of the world’s largest biscuit market and makers of Mcvities also purchased a stake in A & P Foods, one of the leading biscuit manufacturers in Nigeria. A & P Foods produces biscuits from Ikeja, Lagos and is owned by the Assudamal Group (Vaswani Brothers). The company owns the Haansbro biscuits brand and also produces chewing gum, boiled sweets and toffees.
These are what you can classify as a foreign direct investment and more preferable to the transient foreign portfolio investments that most countries loathe.
For a lot of Nigerians looking at these investments and wondering why biscuit? Well this piece of information may change your mind about the positives of the biscuit market in Nigeria.
- Biscuits are mostly made of wheat flour, which is considered healthy and can be sourced locally
- The raw materials and ingredients used for manufacturing biscuits also include, palm oil or vegetable fat, and sugar.
- However, local manufacturers also have to import the food ingredients and additives used for making biscuits. These are not considered major ingredients making this a largely locally sourced market for raw materials.
- Biscuits are a whole some food and also very rich in common nutrients and can be preserved for a long time.
- The biscuit market is largely manufacturing as most biscuits (about 50%) are made in Nigeria.
- Out of the several brands of biscuits in Nigeria, the Yale brands is said to own about 38% market share. Yale brands
- Local manufacturers of biscuits are said to own about 50% of the market share with the rest going to biscuit importers.
- According to Deli foods there exits about sixteen biscuit manufacturers (not sure of date of this claim) operating in Nigeria
- They also claim that biscuit consumption in Nigeria is estimated between 450,000 to 500,000m.t.annually
- Biscuit manufacturing is said to have soared from an annual growth rate to 1-2% to 20% “due to the ban on Importation of biscuits”
- Biscuits manufacturers also employes thousands of Nigerians. For example, Beloxxi employs about 2,300 people and operates through a network of some 400 distributors
- Nigeria’s biscuit sector is said to be growing at an annual rate of 10 to 15 percent
- The growth rate is mostly driven by Nigeria’s rising population growth
- Population growth is also further complimented by an increasingly urbanized market.
- The price point for biscuit, which goes for as low as N50 per packed puts it at a range that is payable by majority of Nigeria who live on much less than $1 (N300) per day.
- The local varieties are grouped into three categories of biscuit and are as follows:
- Soft Dough biscuits – Digestive, Glucose e.t.c
- Hard Dough semi sweet cabin, marie, coaster etc
- Cream Crackers naturally fermented or chemically aerated, salty or sweet.