Olam leverages African position with $167M Nigerian biscuit and candy acquisition

Titanium Holding Company owns Nigeria’s second largest biscuits and candy maker OK Foods, which had a turnover of around $162 million in 2011.

OK Foods has an 18% share of the Nigerian biscuit market and commands 28% and 28% of the sugar candy segment.

Olam said that both areas of the business were growing rapidly.

Production facilities​

Olam takes control of Titanium’s three biscuit and candy factories, which it claims has modern production lines fitted with raw materials management, packaging systems, and a logistics infrastructure, all managed by 1,700 employees.

The company said the deal ties in with its packaged foods strategy. It hopes to grow this area of its business by $100m in profit by 2016.

Olam’s senior vice president and head of Packaged Foods, M Ramanarayanan said: “This acquisition presents a unique opportunity for our Packaged Foods business to scale up and move immediately into a leadership position in two attractive packaged foods categories in the largest consumer market in West Africa.”​

African strategy​

Olam said it hoped the acquisition would help leverage its position in Africa.

The company currently has a strong presence in West African nations including Nigeria, Ghana, Cote d’Ivoire, Mali, Burkina Faso, Togo and Niger.

The company said in a statement: “Biscuits and candy are large and fast growing categories in Nigeria, which is the second largest market in Africa in packaged foods consumption​. “

“As these segments are fairly consolidated within Nigeria, an acquisition of a leading player would [create] a market leadership position without creating excess capacity or competition.”​

The company added that it would use Titanium’s facilities and truck fleet as a biscuits and candy export hub into other West African markets.