Kellogg’s Nigeria, in partnership with Tolaram, has commissioned the construction of a ₦6bn new breakfast cereal factory in Lagos.
The new manufacturing plant, announced earlier last month (Dec 2017), will be built in the Lekki Free Trade Zone of Lagos. At capacity, the factory will produce in excess of 10,000 metric tonnes of breakfast cereals annually. The facility will be financed by Stanbic IBTC Bank on a ₦6bn ($16.7m) loan to the Kellogg Tolaram Nigeria Limited, the joint venture between Kellogg’s and Nigerian food manufacturer Tolaram Africa.
In 2015, Kellogg’s announced a $450m joint-venture partnership with leading food manufacturer Tolaram Africa, “to develop snacks and breakfast foods for the West African market.” The deal also included the future right to acquire a stake in Tolaram Africa Foods, which owns 49% of Dufil Prima – the Nigerian consumer goods manufacturer best known for its popular Indomie noodles.
The tough economic and trading environment and an overestimation of the middle class in Nigeria have led companies including Nestlé to refocus its efforts on the lower end of the consumer class. Kellogg’s local manufacturing focus is aimed at reducing import costs, partnering with strong local distributors and adapting its products to the specific characteristics of the market.
John Bryant, Chairman of Kellogg’s, said that the investment not only pursued Kellogg’s commitment to its partnership with Tolaram but also to the Nigerian market. Tolaram’s chairman, Mohan Vaswaniname, indicated that the new factory would not only increase the scale of the Kellog’s breakfast cereals retail in Nigeria but also broaden the range in offering to Nigerian consumers.