Dangote Flour Mills has left the noodles business after they sold
their assets to Dufil Prima Foods, makers of Indomie noodles, saying it
no longer consider it as strategic.
In an announcement on Tuesday, by the company, they said in order to
smoothen the transition, it had offered Dufil the use of some of its
facilities on an interim basis.
The noodles business was part of the DFM, which the Dangote Group recently reacquired from Tiger Brands.
The Group Managing Director, Dangote Flour Mills, Thabo Mabo, said
the divestment was part of strategies of focusing on core areas of flour
and pasta production, where the company has substantial market share.
He said that with the divestment, Dangote Flour would now focus on
its strengths in flour and pasta and become more profitable by improving
in areas of quality, distribution and marketing.
The transaction, which became effective last Monday, according to
him, is a win-win situation for Dangote Flour Mills, Dufil Prima Foods
and workers of Dangote Noodles, as Dangote Flour stands to have more
market presence through robust marketing.
Mabo described the sale and transfer of assets as one of the most
perfect divestments, with Dufil Prima Foods taking possession and
kicking off production immediately.
Under the terms of the sales agreement, Dufil Prima Foods, according
to him, will continue to produce and sell noodles under the brand name,
‘Dangote Noodles’ for two years before changing the brand name.
The Chief Executive Officer, Dufil Prima Foods, Deepak Singhal,
confirmed the deal and described the acquisition of Dangote Noodles as
strategic as Dufil continued to seek more dominance of the noodles
market.
Acquiring Dangote Noodles, he said, would help Dufil deepen and
sustain its market share as well as gain a strategic advantage in terms
of several range of noodles products on its stable.
He restated that Dufil was not shutting down the noodles production
line but was commencing production with the brand name of Dangote
Noodles immediately.
To ensure seamless transition and commencement of production, Singhal
stated that most of the former staff members of Dangote Noodles would
be employed by Dufil Prima Foods.
With the new development, some former employees of Dangote noodles
would transit to Dufil Prima Foods, while the rest redundant workers had
been adequately compensated with mouth-watering severance package for
their services to the company over the years.
Singhal added that the terms of the severance package were agreed
with the relevant trade unions and the affected workers were paid off
immediately to enable those retained by the new owners to start on a
fresh contract, while those who would not be retained would not have to
wait for their benefits.
Punch