Kellogg has released its Q1 2018 financial statements results.
Highlights of the result show an improvement in net sales performance, driven by key business brands across the portfolio.
- The net sales grew by 4.7% in the quarter from $3.25 million in Q1 2017 to $3.40 million in Q1 2018.
- Operating Profit also increased from $280 million in Q1 2017 to $510 million in Q1 2018. This represents a massive growth of 81.7%.
Kellogg also revealed plans to expand its interest in business partnerships with Tolaram in West Africa. The Company announced it is investing a total of about $420 million in addition to its joint-venture equity interests.
Kelloggs-Tolaram Nigeria Limited is a joint venture between the Kelloggs and the Tolaram group. The joint venture was established in 2016 to develop snacks, breakfast foods, and noddles across the West African region.
As part of the agreement, Kelloggs also acquired a 50% stake in Multipro- the largest distributor of food products in the sub-region.
It also has a right to acquire a stake in Tolaram Africa Foods (which holds a 49% stake in Dufil Prima foods).
Steve Cahillane, Kellogg’s Chairman, and Chief Executive Officer noted that the expansion in emerging markets is an important element of the company’s growth strategy.
In his words:
“Africa offers incredible growth opportunities, and our experience partnering with Tolaram over the past couple of years have confirmed that we have a strong relationship, attractive brands, local expertise, and a proven business model. Our additional investment is a statement of confidence in this venture.”
Kellogg’s performance in Nigeria’s competitive food industry.
Kellogg products in the Nigerian market comes in different brands namely the
- Coco Pops
Despite the stiff competition from other players in the industry such as Nestle, and Nasco, Kellogg products have recorded huge success in the market.
The products which come in different sizes and prices are also affordable for both high and low-income earners in the country.
However, there are still some challenges facing the industry.
According to the Marketing Manager, Kimberly Clark, Sub-Saharan Africa, Oluwakemi Saliu, while speaking at an event organized by the American Business Council for Fast Moving Consumer Goods (FCMG) companies held recently noted that Nigeria could be an FCMG investor’s haven considering the rising number of consumers in the country, but noted the need to address counterfeiting and parallel trade issues.
“LOCAL MANUFACTURERS ARE HARD HIT WHEN PARALLEL IMPORTS ARE ALLOWED INTO THE COUNTRY FOR GOODS THAT CAN BE PRODUCED LOCALLY.”
The Tolaram Group was established in 1948 in Malang, Indonesia, but has its headquarters in Singapore.
It has operated in Nigeria since 1977 and owns popular brands such as Hypo Bleach and Dufil ( makers of Indomie noodles, Power Oil and Minime chinchin)
The Kellogg company ( also known as Kelloggs) is an American nutritional company with headquarters in Battle Creek, Michigan, United States. Kelloggs was founded on February 19, 1906, and listed on the New York Stock Exchange.
The company is home to popular brands such as Kellogg’s cornflakes, Keebler and Pringles.
Additional contributions from Ayooluwa Haastrup.