Flour Mills to Expand Edible Oil Refinery, Raise Funds
By Dipo Olowookere
Plans are underway to expand the edible oil refinery of Flour Mills of Nigeria Plc, Premium Edible Oil Products Limited (PEOPL), the management has said.
The arm of the business used to be known as Rom Oil Mills Limited until it was changed to PEOPL recently by the company.
Business Post recalls that in 2014, Flour Mills commissioned a-400 metric tonnes per day universal refinery in Ibadan, Oyo State.
The factory was built to refine crude palm kernel oil, crude palm oil and crude soybean oil into refined oil and distilled fatty acids.
Flour Mills, which released its first-quarter results yesterday, grew its revenue to N154.6 billion from N134.8 billion in the same period of 2019, representing an improvement by 14.7 per cent.
The improvement in the turnover for the period was because of the continued contribution of its key business lines as the food segment accounted for N91.0 billion versus N81.6 billion in Q1’19, Agro-Allied arm contributed N33.1 billion versus N25.6 billion in Q1 2019, while the sugar business accounted for N27.0 billion versus N24.1 billion in Q1’19.
At an analyst’s call on Monday, the pasta and flour maker said it’s planning to expand its edible oil refinery and grow the reach of its animal feed products.
This, according to the flour miller, is to enable the company to achieve the organic growth strategy of the management.
Also at the call, the Group Chief Finance Officer of Flour Mills, Mr Anders Kristiansson, informed participants that the firm will approach the debt market to raise fresh capital.
He explained that the reason for the move is because it is now cheaper to borrow from the local debt market, where the interest rates for bonds are at a single digit.
According to him, the organisation will issue bonds under its N70 billion debt programme in the next two months, with proceeds to be mainly used to refinance existing debt.
“We have a N70 billion bond programme. We are looking to tap into the market again given the low-interest-rate environment,” Mr Kristiansson said, adding that, “We anticipate coming to the market to refinance some of our existing debt by bringing a bond to the market. We anticipate doing that in the next two months.”
Recall that in April 2020, Flour Mills issued commercial papers worth N30 billion to investors.
On Tuesday, at the Nigerian Stock Exchange (NSE), shares of the company appreciated by 20 kobo or 1.09 per cent to N18.50 per unit.