Afreximbank inks pact with Veenocks to push $117m porcelain tiles plant in Nigeria

Joy Agwunobi

Afreximbank and Veenocks Limited have joined forces to usher in a new era of porcelain tile manufacturing in Africa. The partnership was solidified with the signing of a project preparation facility agreement, which will enable Veenocks to secure funding for the development of a state-of-the-art porcelain tile manufacturing plant in Sagamu, Ogun State. 

This project, estimated to cost $117 million, is set to revolutionise local production and make a significant mark in international markets.

In the wake of the rising demand for tiles in Nigeria, with the market predicted to reach 210 million square metres in 2023 and forecasted to surge to 270 million square metres by 2027, Veenocks Limited is stepping up to meet the challenges of local production. With current local production only able to meet 137 million square metres of the existing demand, the new facility, boasting a production capacity of 6.6 million square metres of floor and wall tiles per year, is poised to augment local supply and boost Nigeria’s industrial prowess.

Kanayo Awani, the executive vice president,   Intra-African Trade and Export Development Bank and Adebisi Abidemi Adebutu, the ultimate beneficial owner of Veenocks Limited, sealed the deal, officially signing the facility agreement that initiated the collaboration between the bank and the company.

In line with the stipulations of the facility agreement, the project preparation facility will be utilised during the critical pre-investment phase to de-risk the project and propel it towards bankability with remarkable speed, sending a powerful message of Afreximbank’s steadfast commitment to the endeavour. 

Furthermore, Afreximbank will be designated as the Mandated Lead Arranger, assuming the responsibility of spearheading the syndication of the debt raise and, if necessary, incorporating credit enhancements to strengthen the project’s financial viability.

The undertaking, envisioned to capitalise on Nigeria’s abundant yet largely untapped natural resources by utilising clay to manufacture porcelain tiles for both the domestic and international markets, will leverage cutting-edge technology to maximise the country’s natural resources on a substantial scale. The project is anticipated to generate over 700 job opportunities, while also resulting in exports estimated to reach a value of $11.4 billion

Speaking on the agreement, Awani explained that the facility agreement reflects 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.

According to Afreximbank vice president, the bank’s holistic approach reflects its comparative advantages in supporting member countries to implement projects efficiently and effectively and of its support for indigenous African investors establishing state-of-the-art manufacturing facilities.

“This facility agreement is a testament to our commitment to advancing impactful projects in Nigeria and across the continent,” Awani added.

Adebisi Abidemi Adebutu, group president of R28 Holdings, the parent company of Veenocks, expressed enthusiasm about the partnership. 

“We are thrilled to welcome Afreximbank as a key partner in our journey towards sustainable growth. Our state-of-the-art factories will set a new benchmark for world-class facilities in Africa, reflecting our commitment to excellence and innovation,” he said.