Official: Unilever Sells Its Margarine Business


Shareholders of Unilever Plc have approved the plan by the company to divest its spread segment to Sigma Bidco. Unilever’s spread business currently includes the production of Blue Band Margarine.

Recall that in 2017 Unilever in a letter of notice sent to the Nigerian Stock Exchange announced its intention to divest its spread business noting that it plans to consolidate its food and refreshment business.

Unilever Nigeria Plc currently has two segments namely, the Food Products segment FP, Home and Personal Care product segment HPC.

The FP segment includes the production of tea, savory, and spreads, while, the HPC segment includes skin care products, oral care products, household cleaning, and fabric care.

The reasons for the divestment

  • Unilever Chairman, Obi Nnaemeka Achebe, revealed that the spreads segment is slowing down as consumers are turning away from margarine for healthier alternatives.
  • He stated that the decision to divest from the spread business is largely due to the desire by the company to boost shareholders’ return.
  • Achebe said the spread segment has been under-performing globally, adding that the transaction would enable the company to focus more on other well-performing categories.

The revenue figures

In its Q1 2018 report for the quarter ended 31st March 2018, revenue surged by 16% from ₦22.17 billion recorded in Q1 2017 to ₦25.817 billion in Q1 2018.

Read Also:  Multi Award-Winning Entrepreneur Launches Global Fellowship Program for Aspiring And Early-Stage Entrepreneurs

A breakdown of the 2018 Q1 report further reveals that the Food Products segment post ₦12.17 billion in revenue while the Home care &Personal Products Care recorded ₦13.64 billion. Likewise in Q1 2017, FP segment recorded ₦10.49 billion in revenue while the HPC segment posted ₦11.68 billion during the quarter.

The company had last year embarked on a 58.85 billion ($187 million) rights issue which was oversubscribed by 120 percent. According to its Managing Director, Yaw Nsarkoh, proceeds from the rights issue will be used to pay off around $120 million in loans, purchase additional raw materials required for Unilever’s products and meet other working capital requirements in order to build long-term value for all stakeholders.

Sigman Bidco B.V. is an investment company based in Amsterdam, the Netherlands with focus on consumer products and packaged foods.

Unilever Nigeria Plc. is engaged in the manufacture and marketing of foods and food ingredients, and home and personal care products. The Company’s segments are Food Products, Home Care, and Personal Care products.

The company’s shares are listed on the Nigerian Stock Exchange NSE and it is currently flat at ₦49.90 on the floor of the stock exchange, its 1-year return is 47.89%.


Credit: Nairametrics