The Management of Union Dicon Salt (UDS) Plc has initiated a 48-month, $100 million strategy that is aimed at transforming the company into an integrated fast moving consumer goods (FCMG) and Agri – business with an initial focus on food and agriculture.
The Managing Director of UDS, Mr. Chuka Mordi made this known during the company’s ‘Facts beyond the restructuring’ to stockbrokers at the Nigerian Stock Exchange (NSE).
Mordi stated that the models for the plan are: farming (build production capacity in key food areas); processing (become a national manufacturer and distributor of FMCG in foods); logistics(build an integrated supply chain and be a processor of agricultural products and food ingredients. He also disclosed that core investors have injected a total of N3.3 billion into the company to revitalise it.
He said that discussion is on-going with Central Bank of Nigeria (CBN) and other financial institutions to get cheaper loans, adding that the estimated cost for corporate restructuring and business transformation of cassava farming and starch processing for the next two years is between N5billion and N10billion, while rice farm development and fruit juices is N5billion.
The MD stressed that the indicative costs of the development plan is based on initial discussion with potential hires, consultants and acquisition counter parties. He said that to revive the business, the company will raise 40 per cent equity and 60 per cent debt.
He added that cassava and starch production is the immediate focus of the business to achieve near-term profitability and drive the company’s growth and success.
“Leveraging on 2015’s success and announcing the return of the UDS, we want to finalise the acquisition of cassava and rice farms, acquire 7,900 hectares in Delta State and finalise agreement for land in Ebonyi State.
“We are working with Federal Government, State Governments and private land owners. In the pipeline, we have over 10 transactions, these will establish a long term, land bank pipeline,” he added.
UDS recently replaced the Cargil, a United States based agro-industrial as core investor in the Alape Staple Crop Processing Zone (SCPZ) in Kogi State.
