By Raheem Akingbolu
GB Foods, manufacturer of the popular Gino tomato paste brand, has inaugurated its new N5.5 billion ($14.5m) factory in Ogun State. The new factory will be used to make its mayonnaise brand, Bama, for the Nigerian and West African market.
The opening of the new factory accompanied a redesign of the Bama brand. New packaging includes a quality stamp designed to tell consumers about the brand’s quality credentials.
In June GB Foods opened its N20 billionn ($52m) tomato processing factory in Kebbi state, in northern Nigeria. The new factory has been built in partnership with the Central Bank of Nigeria and the state government and is the second largest tomato processing plant in Nigeria.
It is a major show of faith in the Nigerian market by the Spanish manufacturer, which is headquartered in Barcelona.
A big part of the strategy is that the Nigerian government is increasingly reluctant to let valuable forex leave the country to pay for food imports. In August, President Buhari asked the Central Bank of Nigeria to stop providing funds for food imports, saying “Don’t give a cent to anybody to import food into the country.”
With the fall in oil prices, Nigeria’s oil dependent economy is suffering, meaning retaining forex will be even more important. It is likely that the Nigerian government will seek to introduce heavier tariffs and import bans for food products it knows can be made in Nigeria, like mayonnaise.
This new Bama factory is effectively an insurance policy against that outcome, as well as an investment in local production close to the point of consumption.