Veenocks Secures $81.9m Afreximbank Loan for Ogun Tiles Factory

By Adedapo Adesanya

The African Export-Import Bank (Afreximbank) has provided an $81.9 million senior term loan to support the development and expansion of Veenocks Limited’s porcelain tile manufacturing plant in Sagamu, Ogun State, as part of a project now estimated to cost $145 million.

Afreximbank and Veenocks signed an initial $117 million project preparation facility agreement in August 2024 to finance technical, commercial, financial, legal, environmental and social studies needed to establish the project’s bankability.

Demand for tiles in Nigeria was estimated at 210 million square metres in 2023, with local production at 137 million square metres. The demand is projected to rise to 270 million square metres by 2027.

The studies financed through the PPF, complemented by Afreximbank’s pan-African experience, enabled Veenocks to broaden its growth ambitions beyond its primary focus on the Nigerian market.

This support informed the company’s plans to pursue regional opportunities over the medium term, with target markets including Togo, Benin, Burkina Faso, Niger, Cameroon, Ghana, Mauritania and Senegal.

The lender’s $81.9 million senior term loan supports implementation of the plant’s expansion, providing financing for investment in additional manufacturing capacity. The expansion is expected to increase the plant’s total annual production capacity from 3.3 million to 9.9 million square metres, creating a stronger production base to meet domestic demand and pursue regional opportunities.

The expansion is expected to create an additional 300 direct jobs, alongside indirect employment across raw material supply, logistics and distribution. Already, the existing plant employs more than 200 people directly.

The preparation financing has been fully repaid from senior debt, completing the PPF’s funding cycle for Veenocks and replenishing capital to support further projects.

According to Mrs Kanayo Awani, Executive Vice President, Intra-African Trade and Export Development, Afreximbank, Veenocks has demonstrated how project preparation, commercial expertise and senior debt financing can support African industrial investment.

“The studies financed through Afreximbank’s Project Preparation Facility have helped strengthen the project’s bankability and broaden the company’s regional growth ambitions. Our senior debt financing supports the plant expansion needed to convert those ambitions into increased productive capacity, and stronger foundations for intra-African trade.”

“Full repayment of the preparation financing ensures capital is available to support more indigenous African investors and projects. This is the PPF’s revolving model in practice: the funds that have been repaid are used to support initiatives that add value to local resources and expand manufacturing,” she added.

On his part, Mr Adebisi Abidemi Adebutu, Group President of R28 Holdings, the parent company of Veenocks Limited, said, “This investment represents an important step towards our ambition of building a globally competitive manufacturing business in Nigeria, producing world-class tiles to European quality standards and reducing Nigeria’s dependence on imported tiles. The PPF was instrumental in broadening our growth plans and positioning us to penetrate regional markets over the medium term. Our vision is to set the global benchmark for quality in tile manufacturing and to become Africa’s first choice for porcelain tiles.”

“With Afreximbank’s financing, we can now deliver the expansion phase of this project. The facility will allow us to add value to Nigeria’s raw materials, create quality jobs and increase the supply of our porcelain tiles, manufactured here in Nigeria, to customers at home and across the region. Our vision is to set the global benchmark for quality in tile manufacturing and to become Africa’s first choice for porcelain tiles,” he added.