Back in 2020 when Julius Berger Nigeria Plc first hinted that it was venturing into cashew processing, some stakeholders thought it was a joke. Fast forward to February 2022, the company has gone full speed with this diversification plan by constructing a multi-million dollar cashew processing plant in Lagos.
- Julius Berger has diversified into cashew nuts business and is set to unveil its multi-million dollar cashew processing plant in Q2 2022.
- The company, which is primarily into the construction of roads, bridges and buildings, decided to diversify into agro-processing after taking note of the opportunities there.
- Cashew nuts are among Nigeria’s highest-grossing agric exports, having generated $101.2 million in Q2 2021.
What is driving Julius Berger’s bid for cashew nuts?
The company disclosed in a regulatory filing with the Nigerian Exchange Group (where its shares are listed) that it had seen an opportunity in agro-processing and was determined to take advantage. Interestingly, this opportunity has always been there. And it is a huge one by the way.
Checks by Business Insider Africa show that cashew nuts have always been among Nigeria’s top most exported agric produces. Information made available by the National Bureau of Statistics (NBS) show that in Q2 2021, Nigeria’s agric exports surged to the highest level ever on record, even as the country generated N165.27 billion ($396.8 million). Out of this amount, cashew nuts contributed N42.94 billion ($101.2 million). It was the second most exported agro food item, second only to cocoa beans.
Diversification is necessary for corporate growth
Indeed, the growth potentials inherent in cashew nuts are huge. Julius Berger knows this all-too-well, little wonder it decided to make cashew nut processing the cornerstone of its agro-processing venture. Armed with its technical expertise and innovation, the company is definitely poised for a windfall.
“Julius Berger is pleased with and indeed excited about its progress with this initiative. Julius Berger reiterates that our diversification direction would support the continued success of the Julius Berger Group in the future and align with the strategic objectives of the Government to stimulate value creation in Nigeria,” the company said in a statement.
Do note that diversification is a viable corporate strategy. According to Management Study Guide, companies pursue diversification efforts when they are trying to expand and generate more revenue. And this can simply be achieved through the launch of new products in the markets where they already operate.
Besides Julius Berger, another Nigerian company that recently diversified [successfully] is 7Up Bottling Company which started manufacturing a hand sanitiser brand (2Sure) in the middle of the pandemic. The 2Sure brand has quickly grown to become a market mover.