Dangote Noodles gets new owner, workers may lose jobs

Dufil Prima Nigeria, makers of Indomie Noodles, will soon buy off Dangote Noddles, after raising about USD131 million via a debt issuance programme at the capital market.

Dufil, has, over the years, been the leading player in the competitive noodles’ market.

According to a news report by the Nigerian Investment Promotion Council (NIPC), the debt issuance will be done in the local debt market to broaden its funding base and expand the company.

Part of the expansion plans according to the company, is to buy Dangote Noodles in the last quarter of the year and gradually phase out the brands in the next three years.

Thank Mabo an official of Dangote Group, while clarifying the acquisition of Dangote Noodles by Dufil Prima said the divestment is part of the strategic moves of Dangote Flour Mills to focus on its core pasta production activities, an area where the company has an upper hand.

It is on record that Indomie is the largest maker of noodles in Nigeria with over 60 per cent market share across the country. The acquisition of Dangote Noodles is expected to push its share of market to nearly 80 per cent.

On the debt issuance, The Chief Operating Officer of Dufil Prima, Madhukar Khetan said that the debt issue has been approved by the Securities and Exchange Commission, but that the timing of the sale was subject to market conditions.

Dufil said it has appointed Stanbic IBTC Capital, the local unit of South Africa’s Standard Bank to arrange the debt.

Confirming the deal, the Chief Executive Officer, Dufil Prima Foods, Deepak Singhal said the acquisition has been perfected to involve the entire asset of the company. Dufil will also be retaining substantial employees of Dangote Noodles, while others will be paid off based on a negotiation with the workers’ union.

Singhal, who was not specific about the financial details of the acquisition, however said that Dufil is not a public company and as such, it will not reveal how much it had paid for the acquisition.

However, Dangote Flour Mills is expected to state the amount in its first quarter earnings result, which is expected in few weeks from now.