Speaking to BakeryAndSnacks.com in advance of his speech at this year’s Mühlenchemie ‘Future of Flour’ symposium, Odunayo championed the industry’s “creativity and energy which you will find in all aspects of business endeavour in Nigeria.”
Market opportunity
Route to market for the flour millers is largely through small independent bakeries. For Honeywell Flour Mills, “these small outlets make up 90 per cent of our customer base.” This audience comprises “small entrepreneurs” who typify the spirit of the country and often still use local techniques to mix dough by hand.
“Mass grocery retail trade is yet to find its own space,” he said.
Operating challenges
As a non-wheat growing country, Nigeria is the third largest importer of wheat in Africa; importing an estimated 3.7 million metric tonnes (MMT) in 2009 mainly from the US and Canada. Developments are intrinsically linked to changes in wheat prices which, “if rising too high, make retail products unaffordable; resulting in a fall in demand and decline in the market.”
Transportation of raw materials and finished products is equally challenging with a poor road network and limited investment in new vehicles. Problems with deliveries can leave customers temporarily without stock but “no matter how long it takes the miller finds a way to run his business.”
Millers must also comply with government regulations. Vitamin A must be added to the flour “on health grounds.” Secondly, cassava flour is added to wheat flour “to encourage the cassava market and support employment of local cassava farmers.”
Leading flour millers
Flour Mills of Nigeria is the largest flour milling company and has the greatest market share.
Honeywell Flour Mills is among the top four producers in the country, based on installed capacity. Established in 1995 the company recently announced a US$65m investment in a new purpose built mill. The move will give the company 11 per cent of industry capacity and increase its market share from 9 per cent to an estimated 20 per cent.
Dangote Flour Mills is the second largest miller and Crown Flour Mills Nigeria is one of the oldest players.