The Lessons from Okomu Oil Palm and BUA Foods in Nigeria

Nigerian investors like Okomu Oil Palm Company PLC which continues to perform well. Now BUA Foods has come along also. Yes, food companies are rocking it in Nigeria; BUA Foods will soon join the N1 trillion valuation club in the nation just days after it joined the board of the Nigerian Stock Exchange.

BUA Group has emerged as a top-grade industrialized conglomerate with capacity to present two brands in the N1 trillion club; BUA Cement is already there.

BUA Group listed a consolidated entity known as BUA Foods, a combination of its five food businesses comprising pasta, edible oil, sugar, rice, and flour on the Nigerian Exchange Limited by introduction at N40.00/s. The total shares admitted to trading were 18.0bn units of shares, with a market capitalization of N720.0bn upon listing.

This marks the first listing on the NGX in 2022. Given the great enthusiasm that trailed the stock listing, it closed at N44.0/s (8th most capitalized stock on the exchange). BUA Foods has a 1.5million MTPA Combined Sugar Production Capacity, eight ultramodern factories for producing rice, sugar, pasta, flour and 20,000 hectares of arable land located in Lafiagi, Kwara State. (Source: CSL Stockbrokers)

Watch the video below to see the translation and what this means for Africa’s empires of the future redesign.

It is indeed beautiful because just from nowhere, we will have a trillion naira company that came out of the agro value chain. As my video noted, while the knowledge economy era is on the way, the great wealth, at least in the Nigerian Stock Exchange, will be powered by companies in the cement, food and technology infrastructure domains.

This mirrors the two phases the United States passed through many decades ago: in 1917, the largest companies in the US were steel companies. Fifty years later (1967), technology infrastructure firms like IBM took over. Today, the knowledge firms like Apple and Microsoft run the show.

The Nigerian path tracks that redesign except that we’re merging two of the phases as explained in the video.

BUAFoods Plc, the newest member on the Main Board, witnessed a 10% appreciation in share price on Wednesday, to close at N44.00 per share from N40.00, taking the market capitalization from N720 billion to N792.00 billion after the trading session, gaining N72.00 billion.

On Thursday, the company also recorded a 10% growth in share price which can be attributed to investors’ positive sentiment which triggered buy-interests in the shares of the company inducing a gain of N79.20 billion in market capitalization from N792 billion to N871.20 billion, at the close of trading activities on Nigeria’s stock exchange.

The shares of the FMCG advanced from N44.00 per share at the start of the trading day to N48.40 per share, the highest price traded at the close of the market, to represent a growth of 10.00% which in monetary terms is N4.40.

Simply, before Nigerian investors will recognize those apps in Lagos exchange, they need palm oil and pepper for their soups, amala, etc. Once they are happy, the next transition will begin.

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