Due to the oil price collapse and the weakening naira, Flour Mills of Nigeria is awaiting to cut capital expenditure down from 40 billion naira a year ago
Flour Mills of Nigeria expects to cut capital expenditure by almost half this year, down from 40 billion naira a year ago, as the slowdown in the economy, caused by the oil price collapse and the weakening naira, hurts consumer spending. According to the news of Reuters, Chairman John Coumantaros told that Flour Mills had spent around 750 million dollar over the past 3-5 years to build capacity but would expected to spend around 19 billion naira (95.53 million dollar) this year, from cash flows and development loans. A year ago, Flour Mills had planned to invest 1 billion dollar over the next 3-5 years to fund growth and expand into West Africa. But Coumantaros said the company with a focus on food processing, agriculture and logistics, was shifting focus to driving efficiencies and cutting cost to deliver growth. “Rather than growing, investing and expanding, we now have to look inwards” Coumantaros said. Revenue for the manufacturer of pasta, flour, vegetable oil and livestock feed grew 10-15 percent over the last five years.