Franklin Alli
25 December 2008
OPERATORS in the flour milling industry say global wheat price have been dipping their profit margins. The global market price for the commodity is between $4 to $6 per bushel.
There are about ten milling companies in the country. Wheat is one of the major raw materials for flour and pasta products.
"One of the major challenges we have is that wheat is always on the increase. So, as a player in the industry, we have to keep on struggling with price regulation. This means there is no room for excess or abnormal profit. Unfortunately, it is not within our control so we have no choice than to struggle and respond to the challenges," said Production Director, HoneyWell Flour Mills PLC, Mr. Nino Albert Ozara.
He said that despite the negative impacts of the continuous climb in the prices of wheat, the company is "solid as a rock".
"We try to make sure we meet up with consumers standard by giving them quality products. We achieve this through subjecting our input which is wheat to quality control in the laboratory. To measure the input in the lab we do some test analysis. Recently, we brought some new machine and they are all geared towards giving us quality decisions. Essentiality, what we do here is to make sure we have no cause for rejects. To achieve this, we have different machine for different purposes," he said during a facility tour of the company's factories at Apapa and Ikeja.
He further stated that as a result of quality products from the company, the demand for Honeywell Super Fine Flour, for instance, has continued to grow in leaps and bounds as proof of our turnover figures within our 10 years of operations, we have achieved a significant increase in our production capacity.
He noted that in our effort to meet the increasing demand for the company's flour and flour products, they have consistently upgraded production facilities.
Production of Honeywell Super Fine flour commenced in 1998 following the construction and installation of a 200 matric tonnes wheat mill at Tincan Island site. Although the flour milling industry has a low capacity utilisation and a strong competition in the market place, HoneyWell has strong quality brands which have occupied a comfortable niche in the customers mind. We have been able to sustain a capacity utilisation of 80 per cent in an industry environment of about 35 per cent capacity utilisation. Our plan is to boost our capacity utilisation from 80 per cent to 100 per cent. We have embarked on product expansion aimed at rapidly growing our business," he said.
On the impact of epileptic power supply on their operation, he declared, "Actually, we don't depend on Power Holding Companies of Nigeria (PHCN). We generate our own power through diesel generators. The issue of power failure here does not exist. We spend about N80 million on diesel per month. As you are probably aware, the price of diesel recently skyrocketed to N140 per litre. So about two years ago, we took our decision to generate power through gas plants. We knew it was going to happen. So we are building a 12 megawatts gas plant of 3 megawatt each.
"The gas plant is almost 98 per cent complete. Although, the diesel generators will still be on stand-by just incase the gas plants develop problem. By January 2009, we will be on gas. We'll be connected to GasLink Nigeria Limited, a subsidiary of Oando Plc. Nigerian Gas Company gives Gaslink that has monopoly in Apapa area so we'll be connected to GasLink."
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