Dangote Flour Mills may have signalled its exit from noodles production, as it has disposed of two production lines located in Ikorodu and Calabar to Dufil Prima Ltd ( which makes Indomie noodles). The deal is valued at N3.7 billion and also includes Dufil Prima purchasing stock worth nearly N400 million. Dufil, will also produce noodles under the Dangote brand for the next two years.
How both companies benefit
Dangote Flour intends to focus on flour milling and pasta production where it has a competitive advantage. Dufil controls a large proportion of the noodles market with its popular Indomie brand, and the move will increase its market share.
Dangote Flour Mills was incorporated in Nigeria on the 1st of December 2006. The company is listed on the Nigerian Stock Exchange (NSE). Dangote Industries Limited (DIL) reacquired the company from Tiger Brands Ltd, a South African firm in 2015 after it had racked up losses running into billions of naira. Dangote Flour Mill shares closed at N9.22 in yesterdays trading session on the NSE down 0.30%. Year to date, the shares are up 115.29%.
De United foods commenced operations in 1996 in Ota, Ogun State. The company originally started with production of Indomie noodles, but has since diversified into the production of pasta, cooking oil, and chin chin.
Dufil Prima Ltd was incorporated as a private company in 2001 but following a restructuring, it was registered as a public limited liability company and became the holding company of the group in 2008. The company recently raised N10 billion as the first tranche of a N40 billion bond programme.