Flour Mills of Nigeria has exported 10 percent of its locally processed soya bean products for the first time to feed mills in Europe and North Africa, its chairman said, helped by a weaker domestic currency.
It exported 15 000 tonnes of soya bean products from its plant in Ibadan, southwest Nigeria, John Coumantaros told Reuters, after Nigeria floated its currency in June, which made the company’s products competitive abroad.
The naira lost a third of its value after the central bank floated it to preserve its dwindling foreign reserves and resolve chronic dollar shortages caused by a slump in oil prices, which has frustrated businesses.
Flour Mills’ plant, one of the largest soya bean mills in Africa, mills about 150 000 tonnes of soya beans a year into ingredients used for animal feed and vegetable oil, Coumantaros said.
He declined to say how much the exports fetched but said improved earnings in the first quarter reflected the export revenues. Nigeria’s biggest flour miller posted first-quarter profit of 5.87 billion naira in August, up 393 percent from a year ago.
Coumantaros said he expected “palm kernel oil, soya bean meal and other processed exports from locally grown raw materials will achieve between $50 million to $100 million in potential exports within the next one to two years”.
The firm aims to grow its use of local raw materials each year by 10 percent over the next five years, he said. He did not say how much the company currently imports.
Flour Mills has over the years invested in sourcing its raw materials, such as cassava, maize, rice, sugar and palm oil, locally and cut its import bill.
“Our supply chain is turning inwards. We are substituting for imports and exporting more,” Coumantaros told Reuters in an interview.
Coumantaros said the food manufacturer is converting its wheat milling plant in Kano, northern Nigeria into a mill for locally sourced maize and sorghum.
Flour Mills will cut its capex for 2017 to around 15 billion naira ($47.62 million) after a five-year expansion period, during which it spent around $750 million to grow capacity, he said.