We’re committed to achieving economy of scale in food production –Olusanya 

By Chukwuma Umeorah 

The Group Managing Director of Flour Mills of Nigeria plc (FMN), Boye Olusanya, has restated the company’s commitment to achieving economics of scale in food production. This is even as he assured that the group’s long-term strategy is geared at maintaining growth and sustainability in the development of local content to drive food self-sufficiency in the country. 

This is further evident in their recently released unaudited financial results for the nine months (9M) ended December 31, 2022 which showed impressive growth in the food and agro-allied sector accounting for 34 to 39 per cent respectively of the N1.114 trillion revenue. 

The 9M ’23 financial result shows a 35 per cent revenue growth across all business segment attributed to continuous product innovation and effective route-to-market strategies. 

FMN achieved N1.114 trillion revenue for the first time in Q3’23, showcasing solid growth in gross and operating profit. Further analysis of the report revealed the food business recorded 36 per cent top-line growth largely due to continued focus on retail expansion and proactive pricing to cushion steep input costs. 

Revenue in Agro-Allied business grew by 39 per cent driven by robust performance across its categories. The fertiliser business recorded a 64 per cent growth in revenues and 82 per cent profit growth driven by the commissioning of new fertilizer blending plant in May 2022.  

The oils and fat business grew by 54 per cent driven by increased volumes due to intensified milling activities while the animal feeds business reported 20 per cent topline growth owing to increased product availability. Golden Sugar recorded an impressive 34 per cent revenue growth which was achieved due to increased volumes, various customer engagement and popularity of our locally produced brown sugar. 

Commenting on the company’s result, Olusanya, said that “The Q3 earnings trend is a clear demonstration of the Group’s commitment to carrying out its overall long-term strategy of maintaining growth and sustaining profitability by significantly investing in the development of local content through product innovation across our core value chains. Also, as is established by the significant increase in revenue and growth from the Agro-allied category of the Group’s touchpoints, we are committed to achieving economies of scale in food production via crop-specific value chain by increasing productivity and ultimately driving the nation’s attainment of food self-sufficiency”. 

Analysts at Cordros Research said, “With an admirable 9m’ 23 performance the company is likely to outperform the 2022 full year revenue mark. The company remains well positioned to outperform 2022FY’s revenue print, earnings expansion will remain subdued given the effects of the new debt on the company’s books, amid margin pressures from higher costs.”