As part of its regular business
portfolio review, Dangote Flour Mills (DFM), has exited its noodles business as
it does not consider it strategic. The company has sold
the assets of Dangote Noodles to Dufil Prima Foods, makers of Indomie noodles.
To smoothen the transition, DFM has
offered Dufil the use of some of its facilities on an interim basis.
The noodles business was part of
Dangote Flour Mills which the Dangote Group recently re-acquired from Tiger
Brands.
Group Managing Director,
Dangote Flour Mills, Thabo Mabo, said the divestment is part of strategies of
focusing on core areas of flour and pasta production where the company has
substantial market share.
He said that with the
divestment, Dangote Flour will now focus on its strengths in flour and pasta
and become more profitable by improving in areas of quality, distribution and
marketing.
The transaction which
became effective last Monday, according to him, “is a win-win situation for Dangote
Flour Mills, Dufil Prima Foods and staff of Dangote Noodles”, as Dangote Flour
stands to boost more market presence through robust marketing
He described the sale
and transfer of assets as one of the most perfect divestments, with Dufil Prima
Foods taking possession and kicking off production immediately.
Under the terms of sales
agreement, Dufil Prima Foods, according to him, will continue to produce and
sell noodles under the brand name, ‘Dangote Noodles’ for two years before
changing the brand name.
Chief Executive Officer,
Dufil Prima Foods, Deepak Singhal, confirmed the deal and described the
acquirement of Dangote Noodles as strategic as they continue to seek more
dominance of the noodles market.
Acquiring Dangote
Noodles, he said will help Dufil Prima Foods deepen and sustain their market
share as well as gain a strategic advantage in terms of several range of
noodles products in their stable.
He re-stated that they
are not shutting down the noodles production line but are commencing
production with the brand name of Dangote Noodles immediately.
To ensure seamless
transition and commencement of production, he said most of the former staff of
Dangote Noodles are to be employed as staff of Dufil Prima Foods.
With the new
development, some former staff of Dangote noodles will transit to Dufil Prima
Foods, while the rest redundant workers are being adequately compensated with
mouth-watering severance package for their services to the company over the
years.
He said the terms of the
severance package was agreed with the relevant trade unions and staff are paid
off immediately to enable those retained by the new owners to start on a fresh
contract while those who will not be retained will not have to wait for their
benefits.
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Business