By Adedapo Adesanya
Tolaram group of companies, makers of Indomie Noodles, is building the biggest port in West Africa in collaboration Nigeria and China after securing a $1 billion Chinese deal.
The Singapore based entity is set to close financing this week for what could be the busiest port in the western side of Africa, and this could help transform Nigeria’s economy which has taken a lot of hits in the past few years.
This project would be the biggest development Tolaram has ever undertaken and a long way from its roots as a textile trader founded by Indians in Indonesia in the 1940s, as disclosed by Tolaram’s managing director for Africa and grandson of its founder, Haresh Aswani.
“This is a real game changer for us, doing project financing of this scale. It is easy to raise money for a factory — you need $30 million, $50 million. But you want to raise $800m? That’s a whole different ballgame,” he said.
According to Mr Aswani, this new port will be financed with $630 million from the China Development Bank, and $470 million in equity from the state-owned China Harbour Engineering Company, which has a 52.5 percent stake and will build it.
Also, by this equation, this means that 22.5 percent will belong to Tolaram, while the Nigerian Ports Authority (NPA) will possess 5 percent, and the Lagos state government owns the remaining 20 percent.
Tolaram had first ventured into the Nigerian market when it started export Indomie in the late 1980s and has since seen a whole lot of development which includes operation in nine countries and making over $1 billion in annual sales.
However, Mr Aswani revealed his fears over the Nigerian government policies that could affect the company as it did four years ago when raw palm oil imports were restricted just after Tolaram had spent tens of millions on a new palm oil factory.
“When you do business here you have to mitigate your risk, so you hedge, number one, and two, you try and get as much local financing as possible,” Mr Aswani said, adding that, “Sometimes it’s at a high cost but if something goes wrong, it’s worth it.”
Despite possessing a major advantage to the state, Mr Aswani expressed his dissatisfaction at the roads that makes it very difficult to transport goods. He said that government had promised to fix three out of the six roads but noted that working with the Nigerian government had not been an easy ride.
According to an interview quote with the Financial Times, Mr Aswani said: “I will never deal with government again. Give me my permits and let me run the business.”
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