Union Dicon Salt, which operates in the Consumer Goods Sector of equities segment of the Nigerian Stock Exchange (NSE), has diversified into the Agro Industrial Sector, with an initial concentration of cassava, and starch processing.
A statement from the company yesterday said it has finalised agreement with GEA Westfalia of Germany to build the largest industrial starch processing facility in Nigeria.
According to the company, following the signing of a term sheet for the purchase of Ere Egwa farms, in April, it has signed the share subscription agreement to finalise the transaction.
It stated that the company has now completed the first phase of its transformation strategy to becoming a fully integrated Agro Industrial National champion. In addition to this agreement, it added, Union Dicon has also signed an agreement to acquire an additional 15,000 Hectares of land in Ebonyi state for the cultivation and processing of cassava, to starch.
“This transaction will ensure security of feedstock supply, as UDS establishes its Cassava processing facilities in Ebonyi, Edo & Delta State. It will also fulfil management’s commitment to become cashflow positive before the end of 2016,” it stated.
The secretary to the State Government, Ebonyi State, Prof. Bernard Odoh, said, “This is a sign of the trust we have in Union Dicon Salt Plc, to participate in the Agricultural Industrialisation of Ebonyi State.”
The chief executive officer of Union Dicon Salt, Mr. Chuka Mordi, said, “We believe that the 15,000 hectares, added to our existing operations, will enable us develop the leading Cassava & Starch operation in West Africa.”
The company had in November 14, 2013 announced that a new core investor, CBO, Capital Partners, has become a significant minority shareholder in the company. It said CBO Capita Partners has been given a management contract to turnaround the company.
With the deal, CBO Capital has acquired 41 million ordinary shares of the company and has also acquired an option to purchase a further 240 million ordinary shares for a consideration of N3.36 billion.
The executive director of CBO Capital, Mr. Bex Nwawudu, said CBO Capital is very conscious of the exceptional history of the company, and fully intend to take it to greater heights, saying “This is a part of our investment philosophy of dedicated to developing Nigeria.”