Dangote Flour Mills has announced its exit from the fiercely competitive noodle industry and has sold its assets to Dufil Prima Foods, makers of Indomie noodles.
Dangote Flour Mills, which which stated that it no longer considers running the noodles division a ‘strategic’ move has offered Dufil the use of some of its facilities on an interim basis.
The Group Managing Director, Dangote Flour Mills, Thabo Mabo, said the divestment was part of strategies of focusing on becoming more profitable in the core areas of flour and pasta production, where the company has substantial market share.
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.
He restated that Dufil was not shutting down the noodles production line but was commencing production with the brand name of Dangote Noodles immediately and that most of the former staff members of Dangote Noodles would be employed by Dufil Prima Foods.
According to Singhal, some former employees of Dangote noodles would transit to Dufil Prima Foods while redundant workers were compensated as agreed with the relevant trade unions.