LAGOS (Reuters) - Nigerian conglomerate Honeywell group plans to invest 150 billion naira ($750 mln) over the next 2-3 years to fund growth across its businesses and will list one or two subsidiaries on the local bourse, its chairman said.
Oba Otudeko told the Reuters Africa Investment Summit on Monday that Honeywell, with interests in agriculture, real estate and energy, is expanding capacity to tap into the consumer base in Africa’s biggest economy.
“We have a plan to invest up to 150 billion naira in the next 2-3 years and we have started,” Otudeko said in Lagos.
He said 50 billion naira of that investment would be in Honeywell Flour Mills (HONYFLO.LG), its flour milling business which it listed six years ago.
The company has a market capitalization of 23.5 billion naira ($117.5 mln) and is the country’s second-biggest maker of pasta. But it faces growing competition at home, not least from Flour Mills of Nigeria (FLOURMI.LG) and Dangote Flour Mills DANGFLO.LG, a unit of South Africa’s Tiger Brands.
Otudeko said the parent firm, set up 40 years ago, was recapitalizing the flour milling business in a bid to remain competitive. The parent has invested 20 billion naira in the past two years across its businesses.
Otudeko acknowledged that consumers in Africa’s most populous nation had been hit by a devaluation of the naira currency, triggered by a sharp drop in the price of oil, Nigeria’s main export.
But he expected his businesses to weather the storm by continuing to invest to develop scale.
“We actually plan to go to the market. You would see us in the market in another two years, listing one or two of our enterprises,” he said.
He would not say which companies would be listed because the plans were still being drawn up.
The naira crashed through a psychologically important level of 200 to the dollar last month in a rout triggered by weak oil prices and political uncertainty after Nigeria postponed its presidential election.
Security has become a major concern for investors as Nigeria battles an insurgency in the north by Islamist militant group Boko Haram that has killed thousands in the past five years and displaced 1.5 million. The violence has recently spread beyond the group’s stronghold in the northeast.
Editing by Susan Fenton