On Monday, Beloxxi Industries Limited, announced that it received an investment of US$80m from international investors including the German Investment and Development Company (DEG), a subsidiary of KfW and Bob Geldof’s 8 Miles fund. This investment, which is a minority equity sales deal, will help the company increase its production and expand its export base into neighbouring francophone West Africa.
“With this Equity Investment, we will expand our current operations from five production lines to about 10 production lines,” said Obi Ezeude, President and CEO of Beloxxi Industries Limited.
According to DEG, it will be contributing US$10m of the investment while theUS$70m left will be coming from the UK investment firm owned by Musician and campaigner Sir Bob Geldof, 8 Miles and the Africa Capital Alliance. DEG also said that German plant engineering will support expanded production including the installation of four additional production lines at Beloxxi. The expansion is set to create 300 jobs in addition to the existing 2,000 already employed.
“The investment will enable Beloxxi explore the export market accessing the much needed foreign exchange whilst maximizing the potential for growth in Nigeria,” said Ezeude.
This investment comes at a time when Nigeria is already battling with several economic issues. The country is already in a recession, the International Monetary Fund slashed its growth forecast to 1.8 percent and its inflation has risen to more than 16 percent. Fast Moving Consumable Goods (FMCG) companies, including Beloxxi, have been forced to increase the prices of their products, hitting consumers at a difficult time. A three-biscuit Beloxxi package of 21 grams, which was sold for N10 last year, is now being sold for N15 per pack.
Currently, Nigeria’s biscuit sector is growing at an annual rate of 10 to 15 percent and it is driven by the population growth, rising disposable incomes and increasing urbanization, along with the growing popularity of biscuits as a convenient snack.
What you didn’t know about Nigeria’s biscuit market
Almost 50 percent of biscuits in the Nigerian markets are made in Nigeria.
The Yale brand of biscuits is said to own about 38percent market share.
Local manufacturers of biscuits are said to own about 50percent of the market share with the rest going to biscuit importers.
There are about sixteen biscuit companies operating in Nigeria.
Biscuit consumption in Nigeria is estimated between 450,000 to 500,000 million tonnes annually.
Due to the ban on importation of biscuits, biscuit manufacturing is said to have soared from an annual growth rate of 1-2 percent to 20 percent.