Erisco foods decries frustrations as it relocates factory to China
The news of the closure of Erisco foods Limited, the biggest tomato processing plant in Nigeria and the fourth largest in the world hit Nigerians like a thunderbolt, but the disheartening aspect of the news is the alleged frustrations by some government agencies as well as unfavourable business climate that led to the loss of over N3.6B in their operations.
The President/CEO of Erisco Foods Limited, Chief Eric Umeofia, who addressed a press conference in their factory in Lagos, said the company had concluded plans to relocate the tomato processing plant to China from where finished products would be imported and sold to consumers in Nigeria and globally. According to him, the decision to shut down the processing plant was taken after the expiration of a 30-day ultimatum given by the management of the company to the Federal Government to place a total ban on the importation of tomato paste into the country.
Chief Umeofia stressed that despite several efforts to make relevant Ministries, Departments and Agencies of government to support indigenous manufacturers; they are hell bent on frustrating their efforts. According to him “the CBN refused to give us approval till date to use our own deposit of USD460, 000.00 generated from our foreign operations but approves FOREX to importers of finished tomato paste into Nigeria. So, how can we – the indigenous manufacturers compete in the current business climate”? “We have invited the CBN to a debate and challenge them to publish what they approve for the importation of finished products and supermarket items as against what they approve for indigenous manufacturers. Instead, they engage in campaign of calumny asking if I want the FOREX till to be opened for me. If they cannot open the till for me, why open for foreigners”. “The CBN also refused to give us FOREX to import machineries, machine spare parts and raw materials to be used for processing of Nigerian fresh/dry tomatoes into tomato paste in our Lagos factory, in addition to their refusal to give us enough intervention fund/FOREX after several promises to import agricultural tractors, improved tomato seedlings, fertilizers, chemicals, machineries etc for our Katsina Project”, he lamented.
He condemned the statements of the Minister of Industry, Trade and Investment and the Acting DG of NAFDAC in a recent interview that Erisco Foods Limited and other tomato processing companies do not have the capacity to meet the tomato needs of the Country in five years, without taking time to visit our state of the art factory that has the capacity of making Nigeria attain self-sufficiency in tomato paste production by the end of 2016 and for export by 2017. He further decried the recent approval of USD15.1 million by the Apex bank to an Indian company to import items listed in the prohibition list, among others in one bidding at the exchange rate of N280.00/ 1USD while Erisco Foods Limited is running our big factory with FOREX sourced from the parallel market at the exchange rate of over N450.00/ 1USD.
In view of the prevailing circumstances, Umeofia said their relocation to China is a good business strategy for the company as they will make profits operating from there. “We are relocating the factory to China from where we will manufacture and bring back to Nigeria because it is more profitable to us as our continuous operation in Nigeria has resulted in a loss of over N3.6 billion.
“Because of the huge machines we have to move out, winding down will last about nine months as we plan to exhaust the existing raw materials we have before moving our equipment to China. “This decision is therefore final and there is no going back on it; nothing will make us rescind this decision even if CBN decides to give us facilities in Billions of Naira with no interest rate as our mind is made up”.
He said the company has no option than to regrettably return the certificate of occupancy issued to it in respect of the 2,400 hectares of land acquired in Katsina State for the backward integration project back to the state government. In good faith, “Erisco Foods Limited intends to donate all the expenses made on the project including the project drawings and feasibility studies, farm clearing, land demarcations and works done so far amounting to tens of millions of Naira to the State to show our love for the good people of Katsina State, he said.
“We wish to extend our sincere apologies to the President of the Federal Republic of Nigeria and family, the Katsina State Governor and family, and the loving people of Katsina State for their belief in our commitment to deliver as our continuous production in Nigeria will mean losing our investment totally as the same import cabals that exist even before the inauguration of this government are not happy with our commitment to make Nigeria self sufficient in tomato production. We equally thank our numerous customers for their patronage and we want to assure them that our high quality products will still be in the market but produced abroad. The CBN should keep their FOREX as we are no longer interested and time will tell who loves Nigeria more.” he concluded.