Olam invests $202.2m for milling operations in Nigeria

It aims to cement its wheat milling stature in the country.

The agribusiness company is stepping up its wheat milling business in Nigeria as it invests US$150m to set up two animal feed mills, poultry breeding farms, and a hatchery in the country.

According to OCBC, the project would be the largest animal feed mill, breeding farms, and hatchery in Nigeria. The firm intends to utilise the wheat bran from its wheat milling operations, as well as maximize its sourcing networks to buy corn and soy from local farmers.

“Recall earlier that Olam spent US$275m to acquire Amber Foods which owns the wheat milling and pasta manufacturing assets of the BUA Group in Nigeria – a move to strengthen its position as the number two wheat miller by sales volume there,” OCBC said.

“As before, moving downstream makes sense as it will create “demand” for its upstream origination business. However, any sizable benefits are likely to accrue from FY17 onwards at the earliest,” OCBC added.