Despite the harsh operating environment, the hike in global price of wheat and depreciation in the value of the Naira, the management of Dangote Flour Mills, at the weekend reported a turnover of N67.601 billion for the year ended December 31, 2010, up by 10.12 per cent, compared with previous year's N61.388 billion, representing a 10 per cent growth.

Cost of sales and significant increase in tax for the period, contributed to the shrink in net profit.

For example, cost of sales rose by 12.01 per cent to N54.396 billion, from N48.56 billion at the end of 2009, following which profit before tax stood at N4.912 billion, compared with N5.374 billion.

Tax for the period increased by N2.0 billion or 1,070.43 per cent, following which net profit stood at N2.723 billion, as against N5.561 billion.

The directors have proposed a dividend of 20 Kobo for shareholders' approval at the annual general meeting, whose date is to be announced later. The year's dividend represented a yield of 1.3 per cent.

The management of Dangote Flour Mills, had earlier in the year, announced investment in its various manufacturing capacities across the country, raising it from 4,500 metric tonnes to 7,300 metric tonnes per day, representing a 61 per cent net growth in volume turnover.

The company also invested in ultra-modern technology, with machines that are between three months and nine years old, in an industry where equipments are as old as 35 years old.
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Giving a breakdown of its investment in capacity in Lagos, the Group Managing Director of the company, Rohit Chaudhry, explained that the Apapa, Lagos plant capacity was raised from 1,000 metric (MT) tonnes to 2,500/day, while Calabar was raised to 1,500MT from 1,000MT/day, and Ilorin, Kwara State from 500 to 1,000MT/day.

"The investment is despite the global economic meltdown. These projects have since been completed with the exception of Apapa mill which is scheduled for completion in the second quarter," he said, while announcing the start of direct export into Chad, Cameroon, Niger and the West Coast.

This, he said, "is besides other ongoing indirect export of Dangote Flour products through the activities of middlemen and customers," stressing that the company, over the years, had transformed through product development and planned to be a five-product firm by next year with the introduction of maize flour for the Kano market.
Dangote Flour Nets N2.72 Billion Profit, Offers Dividend.