Flour Mills of Nigeria Plc said it has increased its reliance on local raw materials as part of efforts to overcome the challenges posed by the shortage of dollar supply in the country.
The country’s biggest miller by market value also said manufacturers in the country are finding profits under pressure as a result of macroeconomic headwinds.
The Chairman of Flour Mills, Mr. John Coumantaros said this in his statement at the company’s 2016 annual general meeting (AGM) held in Lagos recently.
Generally, he said the year had seen a confluence of adverse conditions, including dwindling oil prices, capital flights, forex scarcity, higher interest rates, power failures, congestion issues, gas and fuel shortages, security threats, among others.
“Taken together, these factors have contributed to a perfect storm that blindsided many other Nigerian businesses, especially those who had not taken the necessary precaution. Whereas much of the sector was brought to its knees this past year, Flour Mills Nigeria has been able to navigate through these troubled times increasing market share and streamlining its cost structure,” he added.
Coumantaros said the manufacturing industry was grappling with monumental challenges including a deteriorating road network, inadequate power supply, worsening security concerns and unrest in the North-eastern part of the country.
“The challenge ahead will be to continue mitigating the effects of our operations of external factors beyond our control and to take matters into our own hands as much as possible. We have just started reaping the benefits of our agro-allied strategy which has afforded us a degree of freedom not available to our competition, who do not have the benefits of a local engine of growth,” he said.
Flour Mills’ results for the year ended 31st March 2016 showed that the group recorded 49 per cent in its profit before tax from N7.7billion to N11.5billion. Also, the group profit after tax climbed to N14.4billion, representing an increase by 71.4 per cent, compared with the N8.4 billion realised in 2015. Furthermore, the group revenue grew by 11 per cent from its 2015 figures of N308billion to N342billion in the year under review.
However, the company posted revenue of N248billion, which represented a growth of eight per cent over the N230billion realised last year.
The Group Managing Director of Flour Mills, Mr. Paul Gbededo, noted that in spite of the strong economic headwinds and tough business environment, devaluation of the naira and unrest in the North-eastern region of the country, the Flour Mills Group had an inspiring year.