Dangote Flour Mills has exited its noodles business and sold the assets of Dangote Noodles to Dufil Prima Foods, makers of Indomie noodles.
Explaining that it was not a “take over” by Dufil, Dangote said it has offered Dufil the use of some of its facilities on an interim basis, to smoothen the transition.
Group Managing Director, Dangote Flour Mills, Thabo Mabo, said that under the terms of sales agreement, Dufil Prima Foods will continue to produce and sell noodles under the brand name, ‘Dangote Noodles’ for two years before changing the brand name.
According to Group Managing Director, Dangote Flour Mills, Thabo Mabo, the divestment is 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 will 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 staff of Dangote Noodles”, as Dangote Flour stands to boost more market presence through robust marketing
He 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.
Chief Executive Officer, Dufil Prima Foods, Deepak Singhal, confirmed the deal and described the acquirement of Dangote Noodles as strategic as they continue to seek more dominance of the noodles market.
Acquiring Dangote Noodles, he said will help Dufil Prima Foods deepen and sustain their market share as well as gain a strategic advantage in terms of several range of noodles products in their stable.
Key developments from the deal
- Indomie noodles and Dangote noodles will remain in the market
- Dufil to produce noodles with the brand name of Dangote Noodles immediately.
- Some former staff of Dangote Noodles are to be employed as staff of Dufil Prima Foods.
- The rest redundant workers are being adequately compensated with mouth-watering severance package
- Terms of severance package was agreed with the relevant trade unions and staff are paid off immediately to enable those retained by the new owners to start on a fresh contract while those who will not be retained will not have to wait for their benefits.