Last year, Honeywell Flour Mills Plc recorded its highest-ever revenue, growing over 36% from N80.45 billion in 2019 to N109.59 billion in 2020. It also recorded a 73.1% increase in profit from N650.49 million in 2019 to N1.13 billion in 2020. As 2021 draws to a close, the food manufacturing powerhouse will be merging with Flour Mills of Nigeria. The deal will see Honeywell Group Limited transfer its 71.69% stake in Honeywell Flour Mills Plc to Flour Mills of Nigeria.
Over 60-plus years, Flour Mills of Nigeria has grown to become Nigeria’s largest flour milling company. It was incorporated as a public liability company in 1960 and started operations two years later with an installed flour milling capacity of 500 metric tonnes per day. It has become a national conglomerate with an installed flour milling capacity of approximately 12,000 metric tonnes per day, offering a range of products, including cereals, pasta, rice, flour, noodles, snacks, and ball foods. It also processes edible oils and refined sugar under the ‘Golden Penny’ brand.
The Honeywell Group is a family-owned investment holding group of Nigerian heritage and has transcended generations. It is well-established across critical sectors of the economy, including foods, real estate, infrastructure, energy and financial services, employing over 10,000 people in the process. It has built a robust wheat processing business alongside a manufacturing system that produces a range of staple foods, including baking flour, semolina, noodles and pasta.
Flour Mills of Nigeria has a wide range of products that are distributed via a wide network woven across the country. It has the largest single-site flour mill and the biggest greenfield sugar production investment in Nigeria. It also has the largest edible oil and margarine factory and largest sorghum milling in Sub-Saharan Africa, generating revenue of over N770 billion.
Through this merger, both companies will form a new, more sustainable food manufacturing giant that can serve Nigeria for even more generations to come. The merger will ensure that more jobs are preserved, and more opportunities open up in the long run. It is also significant because the new singular entity will benefit from more than 85 years of combined history.
Over the years, HFMP has built a production capacity of 835,000 metric tonnes per annum, a long way away from the 70,000 metric tonnes per annum it used to produce in earlier years. It is also one of the few food and beverage businesses in Nigeria to have generated over N100 billion in revenue.
By merging with Flour Mills of Nigeria, the new combined entity offers a wider variety of products. It also gives employees access to more opportunities to play significant roles in Nigeria’s journey towards food security.
Yusuf Omotayo is an investment analyst based in Lagos.