Onome Amuge
Julius Berger Nigeria Plc, one of the country’s oldest and most recognisable construction companies, has formally abandoned its agro-diversification ambitions, opting instead to lease out its cashew processing plant in Epe, Lagos. The move comes after five years of effort failed to yield commercial traction, with the venture dragging on earnings and distracting the company from its core operations.
The decision, disclosed in a filing to the Nigerian Exchange (NGX), marks a reversal from 2020 when Julius Berger’s board first announced agro-processing as a new frontier for growth. The company had commissioned its Epe cashew plant in 2022 with the goal of tapping into Nigeria’s multi-billion-dollar agro-export market.
But by mid-2025, the numbers told a different story. Julius Berger reported a N2.4 billion loss from its diversification activities in the first half of the year, helping to push overall operating profit down 47 percent to N9.4 billion from N17.8 billion in the same period of 2024.
“The Board of Julius Berger, at its meeting of September 24, 2025, took the decision to lease out its cashew processing facilities, upon mutually agreed terms, to Eko Organic Food Industries Limited, whose core business would ensure the continued relevance of Julius Berger and its strategic intent to take value from opportunities in Agro-processing,” the company said in its NGX filing.
Julius Berger has four main business segments including civil engineering, building projects, services, and diversification. The company says the exit from agro-processing will free resources to pursue its strength in infrastructure, industrial and residential building projects across Nigeria and new regional markets.
“The goal of the Board of Directors and the Executive Management of Julius Berger remains to deliver on the strategy of maintaining and strengthening the company’s competitive advantages in the construction sector,” company secretary, C.E. Madueke, said in the filing.
The company’s stock has underperformed this year, returning -5.89 percent year-to-date and closing at N146.1 per share on Thursday, giving it a market capitalisation of N233 billion. Investors have raised concerns about declining profitability and questioned the rationale for non-core ventures in a period of tight margins.
“Construction margins have been under pressure from inflation and higher borrowing costs. Taking on losses from diversification only compounded the problem,” said the head of research at a Lagos-based asset management firm.
Julius Berger’s exit from agro-processing highlights the risks of diversification by Nigerian industrials into agriculture, a sector often touted as the country’s next growth engine but plagued by infrastructure gaps, policy inconsistency, and security challenges.
Several Nigerian conglomerates, from cement to oil and gas, have announced agricultural ventures in recent years to hedge against volatility in their main businesses. Yet few have found quick wins. High logistics costs, poor rural infrastructure, and global competition have meant returns are slower and risks higher than expected.
By leasing its Epe plant to Eko Organic Food Industries, Julius Berger signalled that while it sees value in agro-processing, that value is better realised by a specialist operator. The company noted that it retains a financial interest in the facilities while limiting operational risk.
