The African Export-Import Bank (Afreximbank) has entered into a project preparation facility agreement with Veenocks Limited to finance the development of a state-of-the-art porcelain tile manufacturing plant in Sagamu, Ogun State, Nigeria. The plant, which will be fully indigenously owned, is projected to have an annual production capacity of 6.6 million square meters of floor and wall tiles, with an estimated investment cost of $117 million.
The agreement was signed by Mrs. Kanayo Awani, Executive Vice President of Afreximbank, and Mr. Adebisi Abidemi Adebutu, the Ultimate Beneficial Owner of Veenocks Limited.
The facility will be utilized during the pre-investment stage to de-risk the project and accelerate its progression to bankability. Afreximbank's early-stage involvement underscores its strong commitment to the project. Additionally, Afreximbank will serve as the Mandated Lead Arranger, taking the lead in syndicating the debt raise and potentially incorporating credit enhancements if necessary.
The project is expected to exploit and beneficiate Nigeria’s underutilised natural resources using clay to produce porcelain tiles for the domestic and international markets and will deploy proven technology to enable the country to exploit its natural resources at scale. In addition to creating over 700 job roles over its operational period, the project is expected to result in exports estimated at US$11.4 billion.
Commenting on the agreement, Mrs. Awani explained that the facility agreement reflected Afreximbank's commitment to advancing impactful projects in Nigeria and beyond as well as its dedication to leveraging its diverse product suite to offer end-to-end solutions throughout the project finance value chain.
She added that the holistic approach reflected the Bank's comparative advantages in supporting its member countries to implement projects efficiently and effectively and of its support for indigenous African investors establishing state-of-the-art manufacturing facilities.
Demand for tiles in Nigeria was estimated at 210 million square metres in 2023, with local production at 137 million square metres. The demand is projected to rise to 270 million square metres by 2027.
Mr. Adebisi Abidemi Adebutu, Group President of R28 Holdings, the parent company of Veenocks, stated, “We are thrilled to welcome Afreximbank as a key partner in Veenocks’ journey towards sustainable growth. Once fully implemented, our state-of-the-art factories will set a new benchmark for world-class facilities in Africa, showcasing our commitment to excellence and innovation. This strategic partnership with Afreximbank marks a significant milestone in Veenocks’ expansion plans, enabling the company to leverage the Bank’s expertise and resources to drive growth and development in the region. With this collaboration, Veenocks is poised to make a meaningful impact in the industry, fostering economic growth and creating opportunities for communities across Africa.
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