Singapore-based ingredients firm Olam has acquired Nigerian biscuit and candy maker Titanium Holding Company for $167M as it looks to seize upon the developing African market.
Titanium Holding Company owns Nigeria’s second largest biscuits and candy maker OK Foods, which had a turnover of around $162 million in 2011.
OK Foods has an 18% share of the Nigerian biscuit market and commands 28% and 28% of the sugar candy segment.
Olam said that both areas of the business were growing rapidly.
Olam takes control of Titanium’s three biscuit and candy factories, which it claims has modern production lines fitted with raw materials management, packaging systems, and a logistics infrastructure, all managed by 1,700 employees.
The company said the deal ties in with its packaged foods strategy. It hopes to grow this area of its business by $100m in profit by 2016.
Olam’s senior vice president and head of Packaged Foods, M Ramanarayanan said: “This acquisition presents a unique opportunity for our Packaged Foods business to scale up and move immediately into a leadership position in two attractive packaged foods categories in the largest consumer market in West Africa.”
Olam said it hoped the acquisition would help leverage its position in Africa.
The company currently has a strong presence in West African nations including Nigeria, Ghana, Cote d’Ivoire, Mali, Burkina Faso, Togo and Niger.
The company said in a statement: “Biscuits and candy are large and fast growing categories in Nigeria, which is the second largest market in Africa in packaged foods consumption. “
“As these segments are fairly consolidated within Nigeria, an acquisition of a leading player would [create] a market leadership position without creating excess capacity or competition.”
The company added that it would use Titanium’s facilities and truck fleet as a biscuits and candy export hub into other West African markets.