Afreximbank has provided an $81.9 million loan to Veenocks Limited to expand its porcelain tile manufacturing plant in Sagamu, Ogun State, in a project expected to increase annual production capacity threefold.
The African Export-Import Bank disclosed the financing in a statement on its website on Monday, November 2.
The expansion is estimated to cost $145 million and is expected to raise the factory’s annual output from 3.3 million to 9.9 million square metres.
It is also projected to create 300 additional direct jobs.
The financing follows an earlier agreement between the bank and Veenocks in August 2024, when Afreximbank provided a $2 million Project Preparation Facility (PPF) to fund studies required to assess the project’s viability.
The studies covered technical, commercial, financial, legal, environmental and social considerations. The bank said the findings helped establish the project’s bankability and informed its decision to provide the senior term loan.
Afreximbank’s Executive Vice President for Intra-African Trade and Export Development, Mrs. Kanayo Awani, said the preparation work helped Veenocks develop its plans beyond the Nigerian market.
The bank said the $2 million preparation facility had been fully repaid from the senior debt financing, making the funds available for other projects.
The new loan is intended to finance the factory expansion and provide additional capacity to serve domestic demand and markets elsewhere in Africa.
Veenocks plans to use the expanded production capacity to pursue sales in eight African countries: Togo, Benin, Burkina Faso, Niger, Cameroon, Ghana, Mauritania and Senegal. The proposed markets form part of the company’s medium-term growth plans beyond Nigeria, according to Afreximbank.
Adebisi Abidemi Adebutu, Group President of R28 Holdings, said the expansion would increase the company’s use of locally sourced raw materials and reduce Nigeria’s dependence on imported tiles.
The expansion comes as Nigerian manufacturers seek to increase domestic production of building materials. In April 2023, Nairametrics reported that local tile manufacturers had gained ground following the Central Bank of Nigeria’s restriction on access to foreign exchange for importing 41 items, including vitrified and ceramic tiles.
The Federal Government has also announced plans to establish building materials manufacturing hubs across the country’s six geopolitical zones. The initiative, announced in August 2024, identified Sagamu as one of the proposed locations, with the hubs expected to produce tiles, roofing sheets, ceilings and doors.
